Neo-extractivism in Latin America

Open-face mine. Photo credit: National Geographic

Neo-extractivism: Definition and Background

Since the emergence of neo-extractivism in the early 2000s, the amount of raw materials exported from Latin American countries has increased with very little economic return. In general neo-extractivism is the large-scale process of exploiting the natural goods of a country for the purposes of exportation which includes expanding the realms of exploitation into new areas. These resources are usually nonrenewable and there is very little concern about any potential effects on the environment. The data collected on economic, environmental, and social impacts tend to be unreliable as they are often collected by individuals directly involved with the corporations. Industries that fall under neo-extractivism include hydroelectricity, open-pit megamines, fisheries, oil, energy, and agriculture in addition to many others. Mining may be related to gold, diamonds, coltan, or emeralds. For agriculture, some of the main crops of concern are avocados, soybeans and palm leaf.

In most cases, these extraction projects are led by foreign companies who invest very little capital back into the regions they exploit. This is especially common with mining projects, which have started to spring up all over Latin America. Since 2002, there has been the largest ever mining boom in Latin America. According to the ECLAC, as of 2013 Latin American countries make up thirteen out of the top fifteen places as global producers of minerals. Most of these new mining projects are being run by Canadian mining companies and in some countries, such as Mexico; they control up to 70 percent of all mines. One reason for this sudden mining boom has been the increasing international prices for metals. Another contributing factor has been the easing of regulations around mining that took place in the 1990s resulting in numerous exemptions that have benefited the sector greatly.

Another issue with neo-extractivism is the hoarding of lands which is especially prevalent in agricultural fields. In most Latin American countries, the majority of agricultural lands are held by only 1 percent of the farms. This means that the combined lands of the other 99 percent of farms are still less than that held by the 1%. This disproportionate distribution is greatest in the country of Colombia where 0.4 percent of farms own 68% of the available farm land. These large territorial occupations have also been linked to monoculture and mono-production of crops such as soybeans in Brazil and avocados in Mexico. The large profit return from growing such crops has encouraged farmers to expand their lands in any way possible. This has included the clearing of natural areas such as rainforests that are crucial to the local ecosystems and the stealing of the land of indigenous groups who are experiencing environmental racism.

With the continued growth of neo-extractivism in Latin America, there has been increasing push back from citizens of the region. Some examples are the Observatory of Environmental Conflicts (OLCA) and the Atlas of Environmental Justice (EJAtlas) which both work to combat megamines in Latin America with the help of local citizens. Social conflicts between the mining companies and the local communities have been documented in every Latin American country that has mining projects. As the number of projects increases, so does the number of conflicts and as governments continue to defend neo-extractivism and its often criminal practices, the murder rates of environmental activist in Latin America has also risen.

Mexico: Silver and Avocados

Mexico has experienced neo-extractivism in multiple industries but the two most impactful are silver mining and avocado farming. In 2018, president Enrique Peña Nieto created 75 new mining operations as part of a larger project to attract foreign investors to Mexico. All of these new mines were designed to be open face meaning they would have a larger negative impact on the environment. As a result, a total of 25 percent of Mexican land is being used for foreign mining, which is the highest it has ever been, including during the Porfiriato. The new president Andres Manuel Lopez

Avocado tree. Photo credit: Allaboutgardening.com

Obrador (AMLO) who took office later in 2018 has now had to balance trying to continue improving Mexico’s economy while still protecting indigenous groups and their rights.

In the Mexican state of San Luis Potosi, the Wirraxica indigenous group, also known as the Huicholes, have 130,000 hectares of protected territory which includes the remains of an old silver mine. As part of the project introduced by Peña Nieto, 7,000 hectares of Huichol land was given to the Canadian mining company, First Majestic Silver. This was in direct violation of Article 27 of the Revolutionary Constitution of 1917. This is part of the reason that even eight years after the company acquired the land, they have still not been able to start the mining process. The Huicholes have protested the mining operations for multiple reasons. One, their land was unjustly sold to the highest bidder without their consultation. Two, with an open face mine, there is a great risk of contamination of the underground water supplies which support the Huicholes as well as the Peyote plant that they hold sacred. Three, the mine also presents other serious environmental impacts such as air pollution and permanent destruction of habitat. In an attempt to compromise, the Mexican government proposed some possible solutions. These include laws that require mining groups to consult with the local communities and require them to give some of their profits to help with the development of these same communities. However, neither of these two proposals suggest any way to reduce the grave environmental impacts that will result from the continued use of such mines.

The conditions created by neoliberalism have allowed for the extraordinary growth of the avocado industry in the Mexican state of Michoacán and the resulting economic exploitation and environmental destruction. The North American Free Trade Agreement (NAFTA) was signed in 1994 and eliminated barriers to trade between Canada, the US, and México. During the NAFTA era, the avocado became México’s greatest export to the US. Large exporters like Del Monte buy avocados from Michoacán at cheap prices thanks to trade liberalization and resell them to stores in the US at more reasonably valued prices. As a result, the agricultural workers get the lowest share of the profits, despite completing the most strenuous labor in the process. The high demand for avocados in the US has altered the landscape in Michoacán. 80 percent of all avocados consumed in the US come from Michoacán and there has been a 150 percent increase in the number of avocados consumed by the average American in the last 20 years. To meet this demand, Michoacán has established a monoculture of avocados. 180,000 hectares of Michoacán including entire mountains is utilized for avocado production. This expansion has had a devastating effect on the environment. The amount of land and water required to grow avocados at this rate has led to the desertification of farmlands, a disruption of the rain cycle, deforestation, and the depletion of lakes and natural aquifers. The people of Michoacán initially thought that the “avocado boom” in the US would aid in the economic development of their state, which experiences elevated levels of rural poverty. In reality, it has provided low-paying jobs that are not bringing people out of poverty and has had a detrimental environmental impact.

Venezuela: Oil and Illegal Mining

Over the last couple of decades the political situation in Venezuela has continued to deteriorate. Combine this with neoliberal policies and practices of neo-extractivism and you have the perfect conditions for exploitation of the Venezuelan people and land. When Hugo Chávez came to power democratically in 1998, he promised economic change and an end to corruption. He advocated neoliberal policies and unity throughout Latin America. He was one of the first Latin

Oil spill in Lake Maracaibo. Photo credit: The News International

American leaders to reach out to China as a political ally instead of the United States. As this alliance grew stronger and Venezuela’s relationship with the U.S. grew weaker there was a shift in supervision over oil and mining practices. In the past, Venezuela had mainly collaborated with the U.S. and Canada but after Chávez took power, the country started to look towards Russia and China for this. Now the majority of foreign loans in the country come from the Development Bank of China and are mainly targeted towards infrastructure, energy and mining. China mostly invests money in extractivism making Venezuela further dependent on them.

This shift in alliances was also accompanied by a slackening of previously strictly enforced environmental policies and regulations and governmental supervision and maintenance has all but disappeared. Prior to all of this, the nationalized oil industry had been run as if it were a business, a separate entity of the government. There were good environmental laws and Venezuela was even the first country to have an Administrator of the Environment. There was frequent government supervision and the Venezuelan citizens were the ones who benefited from the exportation of oil. Now, Lake Maracaibo has become contaminated by frequent oil spills which endanger the wildlife that rely on this lake as a crucial part of their ecosystem as well as the Venezuelans who fish there. It is likely that the rise in oil prices initially justified the oversight of environmental regulations, but as prices continue to drop, Venezuela has unintentionally become financially dependent on Chinese investments in the extraction of their natural resources.

With the growing political problems in Venezuela, there has also been an increase in unsupervised mining for metals such as gold and coltan in the southern part of the country. This part of the country is especially vulnerable to environmental damage with the presence of the Amazon rainforest and multiple rivers that feed into the Amazon River. The main source of contamination is mercury, which is used by gold mines specifically to extract the precious metal. The type of mercury they use in the mines is called elemental mercury, which occurs naturally in the environment and can be excreted in case of consumption. However, once the mercury enters the water supply it becomes methylated meaning that once it is consumed it can no longer be excreted from the body. This includes lakes, rivers, ground water, run off, etc. Any organism that consumes contaminated water will become contaminated as well. While a small amount of mercury is not deadly, the gradual build up over time can lead to numerous health complications. This is further complicated by the concept of biomagnification. This is a biological process by which the consumption of already contaminated foods leads to a higher concentration of mercury in organisms at the top of the food chain. This means that as humans continue to consume contaminated fish, wildlife and plants they continue to expose themselves to more and more concentrated doses of mercury. This eventually accumulates in the kidneys and there is currently no medical treatment for mercury poisoning.

Conclusion

Based on these two case studies of Mexico and Venezuela, it has become clear that neo-extractivism poses a great threat to the people, economy and environment of Latin American countries. The threat is especially serious for indigenous groups whose lands are stolen in order to expand extraction practices and contaminated by the harsh chemicals used in the various extraction processes. With very little economic return to the regions, it is becoming increasingly difficult for countries to justify this exploitation. Environmental groups such as the OLCA and EJAtlas are just a few examples of how Latin Americans are pushing back against these injustices. The correlation between Latin American countries with mining projects and the growing number of social conflicts in these countries is another signal that Latin Americans are tired of being used by more developed countries as a means to an end. If these environmentally detrimental neo-extractivism practices are allowed to continue they could be the tipping point that pushes the earth past the point of no return.