• IDENTIFICATION
• LEGAL CLUSTERS
• GEOGRAPHIC CLUSTERS
• TRADE CLUSTERS
• ENVIRONMENT CLUSTERS
• OTHER FACTORS

I. Identification

1. The Issue

2. Description

The mining of these materials has a long history in Cuba. During the 1950's the mines suppled the American government with the majority of the nickel and cobalt needed to fight the war in Korea. After the Castro revolution the mines were nationalized without compensation given to their American owners and the mines then went on to serve Cuba's new ally, the Soviet Union. However, the collaspe of the Soviet Union has not only ment the collaspe of another market it has also ment the withdrawl of Soviet aid and technical support for the mining industry. Furthemore, years of a centrally planned economy has taken its toll on the condition and efficiency of these mines.

Hence, the Cuban government has once again sought foriegn investment in the mining sector. Investment has come from a variety of contries however, it is Canada (currently Cuba's largest overall investor) that has provided most of the investment capital. Canada, which has nickel and cobalt resources of its own, is well tooled with the knowlege it takes to run such an industy. Furthermore, companies such as Toronto based Sherritt International seek to be a controling power in the production of nickel and cobalt.

Therefore the Cuban government which is desperate for foreign investment to keep it's economy afloat has changed its past stand on foreign investment. It now permits and invites foreign companies to invest jointly with the Cuban government on selected projects. Foreign investors are now able to own up to 49% of selected opperations. This arrangement is hoped to provide favourable profits for both the foreign investor, and the Cuban government. Furthermore, these arrangments permit the Cuban government to maintain control over a situation that exists more out of financial nesssity, then out of their own personal want. Thus, since 1990 Sherritt International has invested over a half billion dollars in the production of nickel and cobalt in the Eastern region of Cuba near the town of Moa. The Moa mines with their 1950's American machinary still in working order and heaps of nickel-cobalt littering the slopes around it, was said to be a tresure trove. Evidently this has proved true when by 1995 production at Moa sored by 80%.

Therefore, according to Sherritt, Cuba has proven to be an excellent investment opportunity. However, part of the reason why Cuba is such a wonderfull investment opportunity lies in Cuba's laxed attitude toward enviormental protection. Officially of course, Cuba mantains a strong stand on the protection of the enviroment. Their new laws relating to foreign investment also contain clauses dealing with eviormental protection. Article 54 of the new investment code states that 'foreign investment is conceived and stimulated in the context of the country's sustainable development, which implies that during the course of that investment, enviormental conservation and the rational use of natural resources shall be carefully undertaken". Article 56 states "the person or company responsible for the damage or harm is obliged to reestabish the previous enviormental situation, repair the material damage and indemnify the injured people"(Oro 25).

However, it is well known that money talks especially in poor nations eager to develop. Cuba is a country that has a government set on maintaining it's power. Thus, the level to which these laws are actually enforced is dependent on that knowlege. Furthermore, Cuba is in many ways the subservant partner in these investment programmes. Again without foreign investment the Cuban economy will continue to spiral into an even more problelmatic situation. Henceforth, the Castro government would fall deeper into choas to the point where social frustrations could condition a movement for a coup d'etat. Another reason why these laws are poorly enforced lies in the nature of the Cuban state itself. Cuba is a repressive state that does not permit its citizens to organize freely without the fear of repression. Thus, with a strong reactionary civil society absent from the picture, it would seem unlikely that the public would risk protesting government policy, even though they are the indirect victims of such.

Thus according to the Cuban American National Foundation's report on the status of Human Rights in Cuba presented in Geneva in 1998, it was argued that "as a result of Sherritt's mining operations in Moa, local residents are now suffering from a high rate of diseases of the skin, and other illnesses associated with the respiratory system. Additionally Moa Bay shows clear evidence of contamination from the raw pollutants that are being irresponsibly cast into its water (p. 4 text ).

Jose Oro author of The Poisoning of Paridise: The Enviormental Crisis in Cuba, examines the mining industries nagative enviormental effect even closer. He argues that the Nickel factory "Che Guevara" at Moa omits large amounts of smoke, soot, NH3, noise and vibrations. He also notes that the dust level in the quarries are at unhealthy levels as well. Oro states that this factory alone produces two and 1/2 million tons of waste each year. Their is also a serious potential of NH3 discharge. The ecological impact of the pollution on the local level is seen by the significant damage done in the town of Punta Brava, as waste runs directly through the town (via the Punta Gorda river) and then eventually out to sea. Thus increasing the chances of enviormental damage to sea life as well (Oro 81).

Furthermore, the "Pedro Soto Alba" nickel instalation also in Moa launches large quantities of H2S into the atmosphere. Again a huge amount of dust exists in the quarries and nearly two million tons of waste is produced each year. In this case Oro argues the local, national, and potentially international impact is great. Notably the amount of H2S launched into the atmosphere is capable of generating acid rain in the Eastern region of Cuba and possibly beyond Cuba itself. Moa bay is again a concern as waste from this facility is also frequently dumped there. Finally, as a result of this dumping the coral reef barrier in this region has suffered greatly. If present conditions are not changed it is likely that the reef will be completly destroyed in ten years time.(Oro p.82)

Moving on to Human Rights (other then having an enviorment free from dangerous waste) we note that the Cuban government and those companies who invest jointly with that government (in this case study Sherritt) are thus involved directly, or indirectly with the violation of workers Human Rights. Many of these violations are actually seen by companies like Sherritt, as an advatage to investing in Cuba. They include (as to be explained) low wage payment of workers, and the ability to have a labour force free from unions. Begining with the payment of workers we note that the only employer in Cuba is the Cuban government. Thus the nature of a joint venture where the Cuban government hold marjority control over oppporations ensures, the government that tiltle of sole employer. Thus, Sherritt does not actually pay their Cuban labour force directly, instead Sherritt pays the Cuban government in hard currency (IE US$) in turn the Cuban government pays the workers in nonconveratable Cuban pesos. (Once must note that in present day Cuba those who have dollars are able to buy the products that the state is longer able to supply, those who do not have acess to dollars are therefore condemed to suffer the hardships of everyday life in Cuba) Thus Sherritt pays the Cuban government $US 9.500 dollars per year per worker hired. In turn, the goverment pays workers the equivalent of $US 120 dollars per year in Cuban pesos! In other words, the government appropriates 98.7% of each workers wages. Meanwhile, the Castro government which is a serverly repressive one, is able to stay affloat as a result of their ability to live off the spoils of their workers. Another aspect that must be noted in this relationship is that in Cuba their is one union that is controlled by the Cuban state. It is not one that is democratically elected rather, it is an arm of the repressive Cuban state. In Cuba today the notion of stikes do not exist, as they are officially illegal. Those who wish to partake in a strike are then entitled to a state founded housing allowence in one of Cuba's prisons. Thus Sherritt benefits, and henceforth takes advantage of a labour force that is compliant and technically free from inserrection.

Moving on to trade, and the implications involved in this case we must note the role of the US law: Helms-Burton. Helms-Burton is the latest edition of the US trade embargo toward Cuba which was first put into effect in 1961, as a consequence of the Castro's government decision to nationalized all US owned property without compensation. Helms-Burton replaces all pervious US embargo legislation, and is unique due to its international implications (to be explained as it relates to Sherritt/mines).

Helms-Burton provides that the following must take place for the embargo to be lifted: Legalization of all political activity, public Commitments to free and fair elections, the exclusion of Fidel Castro and his brother Raul Castro from the government, respect for internationally recognized Human Rights, and finally, commitments and progress assuring the return, or compensation for, properties taken from present day US Nationals. Thus, under Helms-Burton, the United States embargo for the first time affects non-US companies. More specifically, Helms-Burton provides that foreign companies can be sued in US courts if they engage in business with Cuba (or involving) property that was previously owned by a US citizen (including those persons who obtained US citizenship through naturalization--ie the majority of Cuban-Americans today).

Therefore, Sherritt like many other non-US corporations that have invested in Cuba falls into the catogory where under US law it can be prosecuted for traficing in stolen US property. This is possible because the mines Sherritt invested in, were formally owned (until they were expropriated by the Cuban government) by Moa Bay Mining Corp., now known as Freeport-McMoRan Inc. based in New Orleans (Worsnip).

However, as for now, Helms-Burton is US law, but the President has yet to fully impliment the law. This is primarly due to the large upset this law has created with many of America's major trading partners including Canada. So far the only real action that has been taken against Sherritt is that some employes of that corporation and their families have been restricted from entering US territory. Furthermore, Sherritt has not been able to invest in the United States as any investment they do make can under Helms-Burton be conficated, and taken as payment for the loss incured by the before mentioned US company. Finally, as the embargo agaist Cuba does not permit any product that is totally or partially of Cuban origin from entering the United States. This means that the nickel and cobalt that is mines in Cuba and then further processed in Canada is bared from the United States. Canada which is the US's largest trading partner and NAFTA member has threated action. This has inculded Canada joining with the European Union in the WTO in an effort to fight the US law there. It has also caused Canada to take up the US at the United Nations as well. Interestingly enough the vote in the United Nations totally favoured Canada and other Cuba investors with only Isreal and Usbeckastan (both of which trade with Cuba) favouring the United States.

Canada has also passed their own version of Helms-Burton. Their version argues that those Canadians who are decendent of the United Empire Loyaltists who fled to Canada after the American revolution have the right to sue Americans that are using "their" property. It should be know that recent examinations have found that many city centres are built on such property, including New York's Wall street. However, all in all this measure taken by the Canadian parliment is largly to show how absurd the US law is and is not intented to be acted upon. In many respects it would seem that Helms-Burton itself falls into the same category as the Clinton admistration seems to understand how much tension it would cause amongst major US trading partners. However, with that said it must be known that the law has not be repealed rather it has only been suspended for 6 mounths. Therefore, the threat of US action still shadows the sitaution. Such a shadow has thus made many potential Cuba investors including Sherritt causios about new investments. At the same time a large consenus believes that the threat is only that and should not deter furtue investments in Cuba.

In conclusion the minning of nickel and cobalt in Eastern Cuba has raised serveral issues. Namely, due to the servere economic crisis the repressive Cuban dictatorship has sought foreign investment capital in the form of joint ventures to secure their government's furture rule. This investment as seen by are study of Sherritt has noted that the Cuban government is so desperate for investment that they are willing to overlook enviormental concerns. Futhermore, the Cubans who are the true victims are unable to express their anger at Sherritt/governments actions as a reslut of the repressive nature of that government. In relation to rights we see how foreign firms abuse the already a bad situation of their workers. This is especially noted in the fact that independent unions and strikes are illegal in Cuba. Furthermore, the fact that the Cuban government steals most of the mine workers wages is just another Human Rights violation. Finally, the issue of trade and sanctions is bought in on two main levels involving these mines. First off, the product of these mines are officially banned from the United States as a result of the US emabargo against that country. Additionally, due to the international nature of the US embargo as codified in Helms-Burton Sherritt has been prosecutly (to a degree (although if the law is fully implimented they can be completly prosecuted) as a result of being accused of traficking in stolen US property. Thus the issue of mining in Cuba is a complex one that needs serious attention from many different perspectives.

3. Related Cases

See Cuba Tourism Case

See Guantanamo Case

See Cuba Nuke Case

See Cobalt Case

See Bauxite Case

4 :

II. Legal Clusters

5. Discourse and Status:

6. Forum and Scope:

7. Decision Breadth:

8. Legal Standing:

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: North America (NAMER)

b. Geographic Site: Southern North America/Carribbean

c. Geographic Impact: CUBA

10. Sub-National Factors:

11. Type of Habitat:

IV. Trade Clusters

12. Type of Measure:

13. Direct v. Indirect Impacts:

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: Yes

b. Indirectly Related to Product: No

c. Not Related to Product: No

d. Related to Process: Yes

15. Trade Product Identification:

16. Economic Data

17. Impact of Trade Restriction:

18. Industry Sector:

19. Exporters and Importers:

V. Environment Clusters

20. Environmental Problem Type:

21. Name, Type, and Diversity of Species

Name:

Type:

Diversity:

22. Resource Impact and Effect:

23. Urgency and Lifetime:

24. Substitutes:

VI. Other Factors