How Argentina's proposed wetlands law could put mining at risk

Bnamericas Published: Thursday, October 06, 2022
How Argentina's proposed wetlands law could put mining at risk

A bill to protect Argentina’s wetlands would put the development of the mining industry at risk, according to the country's chamber of mining entrepreneurs (CAEM).

The trade group, together with industrial associations and mining suppliers, have rejected the proposal as they consider it a threat to the operational continuity of deposits, planned investments of US$20bn and industrial development.

Argentina has more than 600,000km2 of wetlands and the bill would set parameters so that productive and real estate development in the country is carried out under sustainability standards, avoiding environmental pollution.

Mining is the fifth most important sector for Argentine exports, and including projects in an advanced stage with approved environmental permits, exports could triple to US$12bn/y, the chamber said in a statement.

To find out more about the bill, which is in the lower house, and its potential implications for the sector, BNamericas interviewed by email CAEM president Franco Mignacco.

BNamericas: CAEM has complained about the lack of “concerted federalism” in the debate on legislative projects to protect wetlands. What do you mean?

Mignacco: Indeed, there are proposals that have been in the works for approximately a decade, without ever being approved. During that time, the position of the mining industry has never been listened to or considered, although it would be one of those impacted along with agriculture, livestock and other industries. For this reason, last week the chamber, as the only representative of the national mining industry, was present at the agriculture and livestock committee of the lower house, where it made clear what the impact of the bill would be.

BNamericas: What are the problems with the bill?

Mignacco: First, a wetlands law should be within the framework of a consultation between the nation and the provinces, since Argentina is a federal country and its resources belong to the provinces. And in environmental matters, the provinces are the ones that are best qualified, due to their knowledge and closeness, to determine how to legislate and maintain an adequate balance between environmental care and sustainable production.

The overaccumulation of national, provincial and interjurisdictional regulations can generate inaccuracies and gaps in concepts, making it impracticable, leading to uncertainty and paralysis of activities. It’s possible to protect the areas and, at the same time, respect the rights of the communities to have sources of decent employment.

BNamericas: How would mining be impacted?

Mignacco: The bill doesn’t take into account the productive sectors and how it will have social and economic repercussions in the regions. The constitution states that “the original domain of the natural resources existing in their territory corresponds to the provinces.” And each region has its peculiarities in relation to mining.

Mining is an industry where projects require large initial investments, between US$600mn and US$3bn, with a long payback period. Certainties are needed.

Foreign currency is essential for the country, but this law could prohibit activities, without a prior environmental impact assessment to support the ban. Projects already approved would be stopped. This threatens a sector that in Argentina generates more than 85,000 jobs.

BNamericas: And how would industrial activity in general be affected?

Mignacco: All productive undertakings are put at risk. It’s proposed to periodically update the criteria and the ordering of the territory, generating permanent changes and an uncertainty that puts off the investments that the country needs.

Mining wages are among the highest in the country (215% above the national average) and are poured into regional economies. The sector makes 80% of purchases domestically, promoting a solid chain of suppliers, made up of Argentine SMEs.

BNamericas: What initiatives exist in Argentina to protect wetlands?

Mignacco: They are protected by international laws and agreements, such as the Ramsar convention, to which Argentina is a signatory. On the other hand, the environment, including wetlands, are protected by national and provincial laws, such as the general environment law.

And the mining sector has a specific environmental law, being one of the few activities that do. Unlike other industries, it has to submit an environmental impact report before starting projects, which must be updated every two years. It also establishes that whoever causes damage to the environmental heritage must mitigate or repair it and sets sanctions for non-compliance.

Much has been made of the [proposed wetlands] law to curb intentional fires. However, the regulation of burning and fire management already has its own law with sanctions for non-compliance. The most reasonable thing would be to guarantee compliance with existing laws instead of adding new legislation. If approval advances, it should contain a clear definition of what they’re trying to protect, which is the wetland, in line with internationally accepted criteria, such as Ramsar.

BNamericas: What are you requesting regarding the wetlands law?

Mignacco: We ask that they listen to us during the discussion of the bill and take us into account. Nothing that proposes prohibitions should be approved without thinking about the impact on the living conditions of the communities and the activities that take place there.

We request certainties as an industry. That they reinforce the current regulatory frameworks in environmental matters, instead of adding new evaluation instances whose implementation in practice is not entirely clear.

[We ask] that the continuity of productive activities be ensured until the asset to be protected is defined. And take into account the rights of the companies that are developing activities, in accordance with the regulations in force at the time they start.

BNamericas: What is the status of the bill, what are the deadlines and when would it take effect?

Mignacco: This week the bill will be discussed in the lower house, in the committees on resources and conservation of the human environment; agriculture and livestock; and budget and finance, which will meet jointly.

Then it would be discussed by the full house. If approved, the bill would be discussed later in the senate.

From the mining industry we will continue demanding that the impact of the law on our sector and, consequently, on the regions that depend on mining for their livelihood, be taken into account.

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