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Data leak implicates Swiss mining company in pollution coverup

The nickel processing plant run by the Switzerland-based Solway Investment Group stands next to Izabal Lake in El Estor in the northern coastal province of Izabal, Guatemala. Keystone

Solway Investment Group concealed reports of pollution by two of its subsidiaries in northeast Guatemala, according to an international media investigation drawing on thousands of leaked documents. The company, which is also accused of intimidation and influence peddling, “refutes the allegations” saying they are “without factual basis.”

This content was published on March 7, 2022 - 16:29
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The “Mining Secrets” investigation, published on Sunday, involved 65 journalists from 15 countries, including Swiss public broadcaster RTS, Spain’s El Pais newspaper and French newspaper Le Monde. RTSExternal link focused on the company’s use of “influence games, rumors and bribes” to gain the support of indigenous communities.

The investigation conducted by the Forbidden Stories outlines “strategies that Solway has used to hide, in collusion with authorities any element that could infer its responsibility in serious cases of environmental pollution” in Guatemala. The company operates in the Central American nation through two subsidiaries – the Guatemalan Nickle Company and Pronico.

The company’s nickel mining projects in Guatemala have been a recent flashpoint for protests by indigenous groups. The local population accuses the company’s subsidiaries there of not respecting the rights of the indigenous community and of polluting the waters of Lake Izabal, close to the mine. Last year, a state of emergency was imposed on the town of El Estor over the conflict.

Solway Investment Group is one of the giants of the raw materials sector. This multinational nickel company has headquarters in Zug, a low tax canton with a strong presence of commodity traders. Solway has mines in Russia and Ukraine (see infobox below). In Guatemala, it owns one of the largest open-pit mines in Central America.

Environmental incidents

In 2017, the appearance of “red slick” in Lake Izabel, which is adjacent to the company’s nickel processing plant, triggered protests from local fishermen. The company claimed it was simply algae, but fishermen suspected the mine was to blame and demanded an environmental study, according to reporting by El Pais.External link One of them, Carlo Maaz, was shot dead during a clash between police and protestors in May that year.

The fisherman’s final moments were captured in a photograph taken by local journalist Carlos Choc, but officials denied his death.  Forbidden Stories accuses Guatemala authorities of lying “repeatedly about what happened to Maaz, as well as about the environmental impact of the mine.”  The investigation concludes the fisherman’s intuition was right and points to a Pronico communication noting mining deposits reached the lake during “heavy rainfall.”

The data leak included thousands of emails, charts and internal company documents delivered in bulk by anonymous informant, a self-styled “ethical” hacker, to the investigative journalist group Forbidden Stories. The latter’s mission is to continue investigations of colleagues who have been threatened or killed.

The investigation also highlights a significant environmental incident in November 2020, when tonnes of “bunker fuel overflowed or spilled, affecting the outflows channels and Lake Izabel.” The company had said the spill was contained and controlled, affecting neither the outflows channels nor the lake, according to The GuardianExternal link.

Influence peddling

Among the information obtained by Forbidden Stories appears to be plans to spread rumors about members of the indigenous community opposed to the mine, including claims they had contracted HIV/Aids. It is unclear whether these ideas were ever implemented. Other “confidential” documents appear to show payments for “fictitious work” and “artificial salary” allegedly used to curry favour among residents and local leaders.

"This information does not correspond to reality,” the company told RTS.

Donations in cash or kind are also made to local associations, the Swiss broadcaster noted. These donations have strategic objectives such as securing support for the company. Solway's subsidiaries have donated fishing equipment to an association called Boacs del Polochic "with the intention of maintaining the association as an ally", according to an internal documented cited by RTS.

The mine also collects information on its opponents through a network of informants, according to RTS. Several internal documents list the names of individuals who provide information to the mining company. These informants are recruited from several indigenous communities. A company Excel spreadsheet suggests investigations into possible marital infidelity are carried out against community leaders opposed to the mine. However, it is not made clear how this information is used.

In full compliance?

Solway's subsidiaries have refuted these claims. At the head office in Zug, Dan Bronstein, Chairman of the Board of Directors, told Focus: "Solway Investment Group operates in full compliance with national and international legislation.”

"We are monitored by local authorities, international audits and certification bodies, as well as by SECO (State Secretariat for Economic Affairs),” he said. “The Swiss Embassy follows our efforts to consult with local communities in accordance with international standards. (...) We refute all allegations raised without factual basis.”

In Guatemala, the situation does not seem to be improving between the mine and the local communities. In October 2021, the region where the mine operates was placed under a state of siege by Guatemalan President Alejandro Giammattei. The army was sent in to protect the subsidiaries of the Swiss company.

People are asked for their documents at a check point in El Estor, Guatemala, on October 25, 2021, a day after the declaration of state of siege following protests against the Compania Guatemalteca de Niquel -a subsidiary of Swiss Solway Investment Group. Johan Ordonez/AFP

The mine resumed operations in January after a consultative process with indigenous communities that “concluded in a satisfactory way,” according to Guatemala’s ministry for mines and energy.” That decision is being questioned by campaigners in the wake of the leaks. In a statement sent to SWI swissinfo.ch, the company said its operating office in Guatemala would “carefully analyse each and every allegation” brought against it.

Cyber-attacks

The company has also reported “cyber-attacks” against its infrastructure in recent days. In a Monday statement, Solway Investment Group External linksaid sources used in the Forbidden Stories investigation could be part of a broader “misinformation campaign” in the context of the Ukrainian-Russian conflict and noted it had raised the incidence with the Swiss National Cyber Security Centre.

Solway lowers profile in Ukraine

Solway has moderated the pace at its Ukrainian industrial site in Pobuzhsky due to the Russian-Ukrainian conflict. Reporting an absence of military activity in the area, the company said it has halved activity at this ferronickel smelter. Production can still be transported to the port of Yuzhnyi, near Odessa, but not beyond that. Solway says it is waiting for the situation to normalise so that it can increase its level of activity and restart exports.

Exposed in Ukraine, the group also owns a gold mine in Russia on the island of Sakhalin. This economic sector is affected by the international sanctions against Russia. In a statement issued on March 3, Solway "condemns" the actions taken by the Russian government and says it is "abandoning all its projects in Russia with immediate effect.”

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