The Hidden Shame in the Global Industrial Economy

The Hidden Shame of the Global Industrial Economy

Where do the raw materials to build our paneled offices, airplanes, and cell phones come from?  Maybe you really don't want to know. A lot of them come from plunder, of a kind we'd like to think came to an end long ago.



In the 16th century, Hernando Cortez sailed to Mexico seeking gold for the Spanish empire. He found a lot of it, and seized it without compunction, killing any Aztecs who stood in his way. Today, that kind of plunder may seem antiquated-abhorred by the community of nations. Of course, we still suffer the depredations of various transnational criminal cartels and mafias. But those are the exceptions, the outlaws. Today, no self-respecting nation or corporation would engage in the kind of brutal decimation of a whole culture, simply to seize its treasure, that Cortez did. Or would it?

In fact, the plundering of precious metals and other assets is far more prevalent today than in centuries past, and on a larger scale. Now it's not just Spain and a few other military powers seeking global dominance, but scores of nations seeking cell phones and teak furniture, that are seizing materials from native cultures-some of these materials in quantities that the conquistadors could never have imagined. Now it's not just silver and gold, but coltan (for those cell phones), copper, titanium, bauxite, uranium, cobalt, oil, mahogany, and teak. And now, in place of the extinguished Aztecs and other now decimated cultures, it's hundreds of still surviving cultures that are being overrun, in perhaps a hundred countries. And most significantly, while the looting is still done by invaders from across the oceans, it is often sanctioned and facilitated by the victimized peoples' own national governments.

But while the plunder is greater now, it is in some respects less openly pursued and less visible than it would have been for Cortez, had the technology to observe it been available in his day. The conquistadors would likely have reveled in seeing their exploits shown on TV. Today such publicity is avoided, for compelling reasons:

First, plunder usually entails invasion, and in the centuries since Cortez the world's nations have moved toward nearly unanimous condemnation of unprovoked invasion-as reflected in their widely shared shock at the U.S. invasion of Iraq. There has been parallel progress in recognizing the wrongness of enslaving other people or simply killing them for their property. There's an evolving appreciation of human diversity, and of the idea of a global (as opposed to European, or nationalist) community. Yet the incentives for seizing the wealth of others are as economically irresistible today as they ever have been, and the means of doing so are now far more widely available. So the seizing continues, but not necessarily by military assault. That's not to say there aren't still places where the job is done with outright killing, as the following pages will detail. In Indonesia, Sierra Leone, and Nigeria, there have been cases in which people who opposed extractive operations on their land were given Cortez-style removals from the discussion. But where the scrutiny of the global media is present, the means are more indirect, and appear to be accidental. People living near uranium mines that have left piles of radioactive waste on their land die of cancer in unusual numbers, and their children have unusual numbers of birth defects. Indians whose land has been taken over by oil-drilling operations are slowly poisoned by petrochemical contamination of their water and soil. Those living downstream from large gold mines find their drinking water laced with cyanide. Food sources are destroyed, as are sacred places-and people die of spiritual, as well as physical, deprivation. Those kinds of dying don't make the evening news.

Second, the plunder is less visible now because it rarely need be witnessed by the people who end up with the wealth-the major purchasers of gasoline or gold chains or tickets to fly on aluminum-bodied planes. In gold rush days, the lucky miner who found a nice nugget could buy a fancy watch. In the modern economy, the man with the Rolex has likely never been anywhere near a gold mine. The big extractive industries are far from the urban centers where most of the affluent live. In poorer countries from which much of the world's mineral and forest wealth is taken, the extractive operations are often in remote jungles or subsistence farming regions-homelands to people who are largely left out of the global dialogue and trade.

Finally, there is the unspoken disincentive of the world's media giants to expose the exploitative nature of the industries that provide the raw materials of the economy that pays their way. Nearly all media, whether print or electronic, are funded by advertising for consumer goods that too often originate with raw materials largely taken from indigenous land or from ostensibly protected parkland. It would perhaps be unfair to say the media are part of a conspiracy of silence, because in all likelihood most media executives rarely stop to think about what fuels the economy that allows them to profit. But it's fair to suggest that there's a reluctance to undermine the foundations of the economy on which their whole business rests.

Not all extractive industries operate in the shadows. Many are honest businesses, run by people who are attentive to the human and environmental impacts of their operations. But those businesses are far too few. By some estimates, for example, some 80 percent of the logging done in Indonesia-one of the largest producers of wood in the world-is illegal. Some of the largest mines in the world, dumping thousands of tons of deadly poisons into their surroundings each day, are operating without the consent of the people whose land they have taken over.

Big Footprints

Mining and logging operations-the "extractive industries"-aren't just small pin-pricks in the Earth's skin, though they may appear that way on maps. Apologists may think of them as small holes discreetly drilled in large territories, for which small compensations to the impoverished inhabitants of those territories may be sufficient. But in fact, extraction has far-reaching impacts and costs. Because nature is not static but involves continuous movement of wind, water, and wildlife, contaminants released by mines can cause Pandora-like destruction.

One of the most alarming forms of contamination is that of heap-leach gold mining, a modern technique that involves pouring rivers of cyanide on huge piles of low-grade ore to extract the gold. Cyanide is extremely poisonous: a teaspoonful containing a 2-percent cyanide solution can kill an adult. In February 2000, a dam holding heap-leach waste at a gold mine in Romania-the Baia Mare gold mine owned by an Australian company, Esmeralda Exploration-broke and dumped 22 million gallons of cyanide into the Tisza River. The poison flowed more than 500 kilometers downstream into Hungary and Serbia, wreaking what some called the worst environmental disaster since the Chornobyl nuclear explosion in 1986. Unfortunately, this event could not be written off as the last gasp of an outmoded technology. Heap-leach gold mining is on the increase. In Peru, the Yanacocha gold mine-second largest in the world-sits atop the South American continental divide, from which any similar breech would run all the way to both the Atlantic and Pacific Oceans. And in Tanzania, the Geita mine has just been sited on the Nyamelembo River, which drains into Lake Victoria. One of the largest and most valuable fresh-water lakes on the planet, Victoria is essential to the economies of Kenya and Uganda as well as Tanzania. A Kenyan environmental professor, Wangari Maathai (now the country's environment minister), described the Geita mine as "the most insensitive economic undertaking I have ever come across," explaining that "it is not just a matter of poisoning people. Very soon, the European Union will ban all fish exports from East Africa just because some toxic elements have found their way into the fish, and it will be a great economic loss to the local people whose life depends entirely on fishing."

The kinds of spills produced by modern mines shouldn't be compared to the relatively petty crime that occurs when someone dumps dry cleaning fluid into the sewer drain, or drops his old batteries into the garbage. Mine waste sends huge plumes of poison into the world's rainforests, groundwater, and food. In Zortman, Montana, in 1982, the Zortman-Landusky gold mine spilled 52,000 gallons of cyanide into the local groundwater, and it was discovered only when a local mine worker smelled cyanide in his faucet at home. Cyanide was the agent used to kill Jews in Hitler's gas chambers. Today, in West Papua, Indonesia, a gold mine owned by the U.S. company Freeport McMoRan dumps 120,000 tons of cyanide-laced waste into local rivers every day. In Papua New Guinea, the Ok Tedi copper mine, which was built on the local people's land without their consent, dumps 200,000 tons of waste per day into the Fly River and has brought the once biologically rich region to ruin.

There are other means, besides rivers, by which damage from extraction can be spread. Wind, in particular, can be as dangerous a factor with big mines as with broken nuclear plants. Uranium mines produce huge piles of crushed ore waste, or tailings. According to the Center for World Indigenous Studies, the most common health risk associated with uranium mining is breathing radon-222 gas, which will continue to seep from the tailings for thousands of years to come. In Australia, the tailings dam of an abandoned uranium mine was burst by monsoon rains, and subsequent dispersal of the waste by river and wind has polluted an area of 100 square kilometers of land-driving out the Aboriginal people who lived there. In the U.S. Southwest, radioactive waste from an abandoned uranium mine owned by El Paso Natural Gas Company has blown toward an area used by Navajo Indians for shepherding.

In some cases, the extraction is not at a single point at all, but takes place over a wide area. Logging operations have decimated some of the world's most biologically valuable forests. Many of these operations are either illegal or are sanctioned by corrupt national governments over the desperate objections of indigenous inhabitants. In Bolivia, in the late 1990s, the government granted logging concessions covering 500,000 hectares of Guarayo Territory and 140,000 hectares of Chiquitano de Monte Verde Territory. In Cambodia, illegal logging has led to severe deforestation, flooding, and destruction of rice crops-and to the displacement of people who depended on those forests for subsistence. In Liberia, in the year 2000, some $100 million worth of timber was cut down and sold, mainly to European consumers, to enrich the dictator Charles Taylor and to buy arms for his henchmen. In Indonesia, the looting of forests has reached new levels, with about 2 million hectares disappearing every year.

Buying Silence

Cortez did not have to worry about bad PR. Companies like Shell Oil or Freeport McMoRan may do their extraction in remote places, and with the tacit acceptance of the global media, but they can no longer escape the attention of activists and groups like Amazon Watch, Rainforest Action Network, and the Mineral Policy Center. Shell was burned badly when it was accused of collusion with the Nigerian government in the murder of the Ogoni activist Ken Saro-Wiwa, who had dared to protest Shell's ruination of his people's homeland. So, the major extractive industries have learned to become more discreet about how they take what they want. One of the most common strategies is to offer employment in the mines to indigenous people who are not well informed about the hazards, and to develop a dependency that the workers and their families are unable to break even when their health begins to break-a contemporary form of indentured servitude. An Aborigine writer, Vincent Forrester, describes how this dependency was established at the Ranger uranium mine in his people's region of Australia. Mining royalties are paid to the government, not to the local people. (Most mining companies don't pay royalties to anyone at all.) The government then supplies the community with essential services, but does not inform the people about the effects of the mining on their land and health. "This dependency, I believe, is a form of ransom," writes Forrester. "White Australia says to the under-serviced, fledgling outstation movement, ‘You can have money for Toyotas, for bores, to help you set up, but if mining stops the money stops too.'"

A more hardball way of buying acquiescence is simply to find individual members of the local community who are willing to publicly support a proposed mining project in exchange for a small payment, which in an impoverished area can be a large inducement. The offers open rifts in the local community, causing enough disarray to allow the project to gain a foothold. In the late 1990s, for example, the Navajo Times reported that the HRI corporation, which wanted to open a uranium mine near the Navajo community of Crownpoint, New Mexico, had arranged to give lease payments to some of the Indian landowners living in the community. According to a report by Chris Shuey of the Southwest Research and Information Center in Albuquerque, the total amount of the payoff came to $367,000. The population of Crownpoint at that time was 2,700, which meant HRI was paying $136 per citizen to begin a process that would use the community's underground water-bearing strata as a medium for "in situ leach" processing of uranium-turning the water into a "pregnant solution" from which the uranium would be extracted within one-half mile of several churches, schools, businesses, and most of the homes in the community.

In Madagascar, the Anglo-Austrialian mining giant Rio Tinto has tried to buy off the natives for even less. Rio Tinto wants to mine 40 kilometers of coastal dunes, bulldozing an indigenous homeland that is also a habitat for numerous rare and endangered plant species. The company's strategy has been to invite the villagers to dinners at which they can eat and drink while watching PR films that extol the proposed operation but make no mention of likely damage.

In hundreds of mining or logging operations around the planet, the main economic incentive for capitulation is the lure of jobs. Where people are poor, that lure of short-term cash can easily blind young workers to the long-term impacts of the project on their culture and health-and on the long-term sustainability of their local economy. In the Arctic, Inuit communities are now divided about whether to welcome more intensive oil drilling. Those who see a threat to their traditional way of life have put up strong resistance, but it's rarely enough to fend off the incursions, especially when their own national governments have been bought off. In a globalized economy, the buying-off of governments has become widespread. A few years ago in India, for example, the indigenous Bhagata, Khond, Konda Reddi, and Samantha communities found themselves targeted by foreign companies interested in the bauxite (aluminum ore) deposits on their lands. Indian constitutional law protects indigenous peoples from unwanted exploitation of this kind, but that did not stop the state of Andhra Pradesh from secretly inviting the companies-and giving them leases-to begin mining. The opposing parties have been litigating ever since.

Is There Really No Alternative?

When economists talk about "extractive industries" they're usually referring to mining, oil or gas drilling, or logging-essentially, the use of heavy machinery to cut raw materials from the planet. The concept could easily be broadened to include pumping water from aquifers, hauling fish from the oceans, shooting monkeys for bushmeat, or collecting honey from wild bees. We focus here on mining, oil drilling, and logging because they have been so heavily concentrated in places that are both the homelands of the world's marginalized peoples and the habitats of the most threatened ecosystems. These industries are therefore the most direct-and least regulated-assaults of industrial society on the Earth's cultural and biological stability.

To some extent, the lack of restraint in these industries may reflect an implicit belief, in the governments of industrial nations, that the genie long ago exited the bottle, and that trying to undo any damage it has done now is as unrealistic as trying to undo the damage done by the seizing of Indian territories by Europeans two or three centuries ago. But the idea that redressing past injustices is now "unrealistic," too, makes a questionable assumption-that the descendants of the conquered Indians have long since been assimilated into the modern industrial economy and share the same benefits as the descendants of their conquerors. Yet, the reality of places like the Navajo reservations in the U.S. Southwest belies that assumption. Native American communities are far more impoverished, with far higher rates of disease, unemployment, and suicide, than the rest of the country. And it's on Native American lands that the most blatantly exploitative extractive operations are concentrated. A similar observation can be made of the oil-rich Ogoni lands of Nigeria, or the Guarayo territory of Bolivia, among scores of others.

The political inertia that has allowed colonial-era racial distinctions to be perpetuated in the twenty-first century economy has also allowed outmoded assumptions about industrial productivity to be perpetuated. The prevailing belief is that if we want to continue having the rich lifestyle to which we are now accustomed, we have no choice but to keep on drilling and digging in the places where we already are-and, indeed, to commence new drilling in any place where more resources can be found. If the Inuit are hunting caribou in the Alaska National Wildlife Refuge (ANWR), but the war on terror and the fueling of American Hummers and Expeditions demands oil and there's oil under ANWR, sooner or later the Inuit will have to step aside-will have to forget their antiquated ways, learn to speak English, head south, and find jobs at Exxon gas stations or Wal-Mart.

Such assumptions have been amply discredited, though you might never know it from following the mainstream news media and its conservative-dominated commentary. The discrediting takes several forms, each of which involves the exploding of a persistent myth about the materials economy:

"Economic growth requires increasing materials and energy consumption."

In other words, population momentum (the unavoidable population growth of the coming years even with maximum stabilization policies), plus rising standards of living across the planet, will necessarily drive up demand for raw materials. Historically, economic growth has meant soaring material consumption. But the idea that this link must continue assumes that the efficiency of materials use must remain constant, which it need not. If cities were redesigned to be more compact, for example, the quantities of materials required to provide housing and transport per capita could be greatly reduced while actually improving the quality of urban life. As asphalt and gasoline use declined, so would the psychic and physical ravages of traffic congestion, auto accidents, air pollution, and suburban isolation. At the same time, growing efficiency in energy use, both from technological advances and from changes in consumer behavior (how about trading in your Expedition for a Prius, or your leaf blower for a rake?) could vastly reduce the per capita demand for oil or aluminum without compromising the pursuit of happiness. For the 2 billion people who are poorest, hopes for a better life do not have to require further impoverishment for those of their indigenous counterparts whose land is being mined or deforested.

"Meeting the need for increased supply of materials requires taking more out of the ground."

When the benefits of more efficient design and use have been exhausted, we may indeed need to increase the supply, at least until population has stabilized. But to assume that the increase must come from the ground falsely assumes that the new materials must be virgin. In the long-term ecology of the planet, nearly all materials are eventually recycled, and now we need to do that in the short term as well. The mines of the future will be, increasingly, the cities rather than the rainforests. Already, in some areas, aluminum recycling has reduced the need for bauxite mining by half.

"Mining or timbering in indigenous areas is cheap."

This argument is similar to the one employed by Wal-Mart, which says it's economical to get poor people, who have few alternatives, to clean toilets and wash floors for cheap wages. That thinking is just one expression of the more general myth that industry can profit by not paying the externalities, or social and environmental costs, of production. But while economic practice remains entrenched in reactionary doctrine, moral consciousness has come a long way since the days when few people had any qualms about slavery. Exploiting cheap labor is a form of quasi-slavery, and the hundreds of organizations dedicated to raising public sensitivity to that have long since brought us past the point where social costs can be ignored. The true costs of extractive industries will inexorably become more internalized-for example, in requiring oil companies to bear the medical costs of diseases brought by their polluting of indigenous water supplies. As that happens, the prices of oil and other raw materials will rise, and there will be more incentives to develop sustainable substitutions-of renewable energy for oil, of recycled metals and wood for virgin, and of more efficient use for more supply.

That's not to say the mining of minerals and fuels, and the harvesting of trees, will not continue to some degree into the indefinite future. But in a healthy economy, those activities will be done with far greater care, on a smaller scale, and only in places where permission is granted out of choice rather than compulsion-and, even then, only in places where there will be no lasting injury to any human or natural community. Ultimately, it will cost no less to site a mine in an Indian reservation or rainforest than it would to site it in, say, a suburb of Paris or Dallas.


Ed Ayres is the editor of World Watch.


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