Former MNDM ADM Embroiled in Lawsuit Over Mining Cos and Paramilitaries

Activists Sue Firm's Directors; Ascendant duo and TSX named in ongoing feud
Peter Brieger
Financial Post
648 words
26 November 2007
National Post
National
FP3
English
(c) 2007 National Post . All Rights Reserved.

The bitter feud between Ecuadorian activists and a British Columbia mining company has landed in a Canadian courtroom.

A trio of activists, who are opposed to Ascendant Copper Corp.'s move to build an open-pit mine in the South American country, is suing two of the company's directors and TSX Group Inc. after they were allegedly attacked last year by Ascendant-hired paramilitaries.

The statement of claim, filed recently in the Ontario Superior Court of Justice, asks for unspecified damages -- the latest shot in a battled punctuated by violent conflicts, death threats and a hostage taking incident last year.

The directors -- William Stearns Vaughn and John Gammon -- did nothing to stop the violence, even after a meeting with mining opponents, the claim alleges.

Canada's biggest stock exchange, meanwhile, "negligently failed to properly monitor the behaviour of Ascendant Copper Corp. … thereby further facilitating, condoning and encouraging [the attacks]," the lawsuit says.

"The defendants Vaughn and Gammon were in a position to prevent further Ascendant-instigated violence … but failed to do so," says the 10-page claim.

None of the allegations has been proven. A statement of defence has not yet been filed and neither director could be reached for comment yesterday.

The TSX declined to comment yesterday.

A Web site for the penny-stock miner, which is based in Colorado, says the company aims to be a profitable natural-resources firm that has "transparent relationships with the communities directly affected by our operations" and enhances "the living standards of community residents through education, healthcare and job opportunities."

The legal claim says that a local mayor wrote a letter to the stock exchange operator in 2005 asking that Ascendant be blocked from listing its shares on the TSX because it had "caused serious internal conflicts and confrontations … and had adopted a divisive strategy provoking confrontations within the community, which could lead to the loss of human lives."

That was followed by a similar letter from the executive director of the Canadian Environmental Law Association, the claim says.

The conflict near the company's Junin property --about 135 kilometres northwest of Quito, Ecuador's capital -- erupted late last year as company-hired security guards "violently confronted Junin community members who were peacefully resisting their presence," the claim says, adding that the guards shot at the plaintiffs and pepper sprayed them in the face.

Two of them -- Marcia Luzmila Ramirez Piedra and Israel Perez Lucero -- suffered physical and emotional trauma from the attack, the claim alleges.

A third plaintiff -- Jaime Polivio Perez Lucero -- received "various threats against his life" that were linked to Ascendant, the lawsuit says.

"These threats contributed to the overall climate of fear and intimidation in Junin, and caused considerable anxiety and stress to the plaintiffs," the claim says.

Meanwhile, publicity generated by the confrontations and "well-known" cases involving publicly traded mining companies instigating violence against local opponents meant that the TSX "knew or ought to have known … that Ascendant … would use financing attained through listing to hire private security forces and instigate attacks and threats against Junin community members."

Last year, the conflict reached a head after Ascendant security guards allegedly tried to forcibly move community activists opposed to the mine. The incident escalated into a hostage-taking incident, with pro-mining forces kidnapping a handful of journalists and a politician while activists captured almost 60 Ascendant staff.

The standoff ended about a week later. At the time, an Ascendant executive said most of the "paramilitaries" were agricultural consultants hired for a community development project.

Two years ago, activists set fire to a company-owned building. Ascendant officials said a group of local people opposed to the mine "stormed" the building, assaulting and robbing staff, before setting fire to the facility.

pbrieger@nationalpost.com

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