26 years of free trade: industrial paradise for transnational corporations and environmental hell for the people
Mónica Vargas (Transnational Institute)
10 June 2020
How much “development”, “employment” and “well-being” do free trade and international investment bring? Twenty-six years ago, Mexico signed the North American Free Trade Agreement (NAFTA), the most aggressive trade agreement in the world, with Canada and the United States (US) 2. Then, in the year 2000, it signed a similar agreement with the European Union (EU), which is in the process of being “modernised” 3. For years, Mexican and international social movements have been denouncing the impacts of free trade agreements on a wide range of sectors. Between 2011 and 2014, the Mexican Chapter of the Permanent People’s Tribunal held a session to put NAFTA on trial. After rigorously analysing 500 cases of human and collective rights violations, the tribunal ruled that the agreement has generated “a widespread humanitarian crisis that affects various sectors of the population and has caused a crisis of the state” 4. Since then, the situation has only gotten worse. From 2 to 11 December 2019, a caravan of international observers (#ToxiTourMexico) travelled from West to East along the neovolcanic belt in Mexico, crossing dense industrial corridors that have attracted capital from the US, Europe and other countries along the way. Members of the Caravan witnessed the alarming environmental and health emergency situations that the affected communities are experiencing and their impressive organising and mobilising capacity and dignity. In May 2020, it was reported that 78% of the deaths due to COVID-19 in Mexico were in the regions that the caravan had visited.
Behind the industrial paradises
Photo: Martín Álvarez-Mullaly, OPSUR (#ToxiTourMexico, December 2019)
The initial promoters of the “Caravan on the social and environmental impacts of transnational corporations and free trade in Mexico” were the Asamblea Nacional de Afectado/as Ambientales de México (ANAA, or National Assembly of Environmentally Affected Peoples) and the Corporate Power Team of Transnational Institute (TNI). ANAA, a network of 130 indigenous and peasant organisations, trade unions and NGO working on social and environmental justice conflicts in Mexico, launched the call for the session of the Mexico Chapter of the Permanent People’s Tribunal 5. TNI facilitates the Global Campaign to Reclaim People’s Sovereignty, Dismantle Corporate Power and Stop Impunity 6, which has close ties with the UN process on a binding treaty that will force transnational corporations to respect human rights7.
Representatives of the European Parliament, the Parliament of the Basque Country, the Senate of the State of Minnesota (US), scientists and activists from organisations from Argentina, the Basque Country, Catalonia, Ecuador, France, Germany, Mexico, The Netherlands and the US participated in the Caravan8. Other participants include representatives of the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT or the Ministry of Environment and Natural Resources) and scholars from the Unión de Científicos Comprometidos con la Sociedad (UCCS or Union of Scientists Committed to Society)9.
The Caravan’s main goal was to give greater visibility to the impacts of free trade and the presence of transnational corporations in Mexico. As Mexican economist Andrés Barreda points out, it is important to note that neoliberalism has generated not only tax havens, but also industrial paradises in recent decades10. An industrial paradise is an area that attracts investments due to the lack of enforcement of the most basic social, labour and environmental standards. Mexico is playing an increasingly important role in neoliberal globalisation since the mid-1990s thanks to the North American Free Trade Agreement and the European Union-Mexico Free Trade Agreement; the latter may soon be replaced by a new, recently finalised agreement11. Both trade blocs use the country to outsource the social and environmental impacts of their own economies. Transnational corporations are free to act with total impunity in Mexico, as they are protected by the investor-state dispute settlement mechanism (ISDS) that is usually included in free trade agreements.
From a human rights perspective, the consequences have been disastrous. Daniel Feierstein12, member of the jury of the Permanent People’s Tribunal – Mexico Chapter, explains that to implement NAFTA, a socially destructive process was initiated with the goal of dismembering and destroying the Mexican social fabric in order to impose a new model of extraction, production and consumption. This process involved the selective assassination of social and environmental leaders, peasants, indigenous peoples, journalists and human rights defenders, feminicide and a social war disguised as the ‘fight against drug trafficking’. It is estimated that between 1997 and 2018, at least 400,000 people died as a result of violence involving organised crime, with the government as its accomplice13.
During the tour, international observers conducted field visits and attended meetings with local organisations in the following six regions: Santiago River Basin (state of Jalisco); Independencia River Basin (state of Guanajuato); Mezquital Valley (Atitalaquia, Atotonilco, Tula, Apaxco in the states of Hidalgo and Mexico; Atoyac-Zahuapan River Basin (state of Tlaxcala and Puebla); and the northern part of the Isthmus of Tehuantepec (state of Veracruz). In each region, representatives of the affected communities, with the support of scientists who have been documenting the cases for years, presented the impacts of the industrial corridors promoted by free trade on the communities’ health and the environment.
El Salto, the riverbanks of the Santiago River (Photo: Martín Álvarez-Mullaly, OPSUR – #ToxiTourMexico, December 2019)
The Caravan visited industrial corridors that have been consolidated over the past 20 years under the protection of Mexico’s free trade agreements. They observed in situ how the law allows transnational corporations to self-regulate the environmental aspects of their operations in order to attract investment. High-risk industries, extensive agro-industrial activities and extractive operations coexist with urbanised spaces and the lack of monitoring of the impacts on the local population’s health.
Overall, the alarming state of environmental and health emergency that the observers found in the six regions caused them a great deal of concern. The visits brought many problems to light, such as the systematic pollution of the air, water and soil; the destruction of rivers, lakes, forests and farmland; uncontrolled urbanisation; the proliferation of garbage dumps and extremely hazardous waste dumping sites; and the destruction of the health and the fabric of the communities in regions where transnational corporations protected by the trade and investment regime have set up shop. According to information gathered from toxicological reports shared during the tour, the residents of these regions suffer from various diseases, such as liver, kidney, skin and stomach cancer, leukaemia, genetic mutations, miscarriages, kidney failure and dental and skeletal fluorosis. All these illnesses are linked to the activities of transnational corporations operating in different sectors.
It became clear that even though the successive Mexican governments were aware of all of this, they had done nothing about it. What is worse, they made the environmental, labour and social impacts invisible by ignoring the affected communities’ claims and demands; attempted to stifle social unrest through criminalisation, repression and the use of various criminal groups to terrorize social organisations; and facilitated the implementation of new industrial and mega infrastructure projects that increase the risks for the local population even further.
As for the governments of the countries of origin of foreign corporations operating in the industrial corridors, which are mainly from the US and Europe, they have not taken measures to ensure that these transnational corporations are respecting human, labour and environmental rights, nor do they assume any responsibility for the socioenvironmental conflicts that they cause. Furthermore, they promote free trade and investment protection agreements, such as the new agreement between the EU and Mexico concluded in April 2020. One of the key elements in the agreement is the investment protection chapter15. Mexico will be the first Latin American country to sign an agreement with Europe that contains this kind of mechanism. The benefits for European corporations are clear: 35% of foreign direct investment (FDI) in Mexico is from Europe16. But for the Latin American country, which is among the five countries in the world (third in Latin America) with the most complaints filed against it by foreign investors in international tribunals, the investment chapter involves considerable risk. Of the 31 requests for arbitration that the country faced in 2019, seven were submitted by European corporations (five from the Spanish State and two from France)17.
One of the elements that impressed the international observers the most was the affected communities’ capacities to organise and articulate resistance struggles in the six regions. For decades, despite the socioenvironmental devastation of their territories and the constant attacks on their lives and health, they have been monitoring impacts and have developed an advanced capacity for collective analysis that integrates all the dynamics that they face. They have also built ties with scientists who are highly committed to social struggles and who have helped consolidate the communities’ analyses. The advances that these organisations have made will have impacts not only in other regions of Mexico, but also on an international level.
In early 2020, the global health crisis triggered even greater concern among the Caravan’s observers in relation to the potential impacts of the pandemic on the affected communities that they visited. The SEMARNAT and the Ministry of Health’s recent observation that 78% of the deaths caused by COVID-19 appear to be concentrated in some of the regions that the Caravan visited or other very similar regions only added to this concern18. In fact, as the organisations reported in their meeting with SEMARNAT, the Ministry of Health and Consejo Nacional de Ciencia y Tecnología (CONACYT, or the National Council of Science and Technology) on 6 May 2020, the situation in all six regions is one of structural vulnerability and neglect marked by the deterioration of the inhabitants’ immune systems due to the prevalence of comorbidities that strongly interact with SARS Cov-2. This is the case of degenerative diseases such as cancer, kidney failure, respiratory diseases, diabetes, obesity and autoimmune diseases, among others19.
We briefly present below the preliminary results based on the data gathered by members of the ANAA20 and on-site observations21.
The Lerma-Chapala-Santiago River Basin is the location of large industrial, manufacturing, urban and agricultural zones. Some of the more than 70 transnational corporations present in the region are: Nestlé, Huntsman, Forbo Siegling and Omya (Switzerland); Pernord Ricard, Danone and Virbac (France); Mexikor and Valresa (Spanish State); Nefab, Zassa Abloy and Concretos Apasco (Sweden); Operadora CICSA and Cytec (Belgium); DSM Nutritional Products (The Netherlands), QTEK México Pentair Vales and Controls (Ireland); Petosa, Siemens, Continental, WVoit, BDT, ZF Friedrichshafen AG, Salzgitter Mannesmann, Borgwarner and Hella Automotive (Germany). In the year 2000, the affected peoples began organising to demand an investigation into the impacts of the industrial corridors on the health of the population22. In 2011, a study on the quality of the water of the Santiago River by the Instituto Mexicano de Tecnología del Agua (IMTA or the Mexican Institute of Water Technology) confirmed the presence of 1,090 pollutants in the water, daily discharges of 507.5 tonnes of toxic waste into the river and the failure of 94% of the factories to comply with the lax effluent standards23. Despite these findings, no measures have been taken to remedy the situation or provide assistance to the population. What is more, it took the state of Jalisco 10 years to release the results of a study commissioned to Universidad Autónoma de San Luis Potosí (UASLP or the Autonomous University of San Luis Potosí) – which it only did in December 2019 as the result of popular pressure. Data collected on 300 children between 6 and 12 years of age from El Salto, Puente Grande, Juanacatlán, Colonia Jalisco and Jardines de la Barranca found traces of: arsenic in 45% of the children from Juanacatlán; cadmium in 97.8% of the children from El Salto; mercury in 59% of the children in Puente Grande; lead in 93.8% of the children from Juanacatlán; and benzene in 73.7% of the children from Juanacatlán24. According to the affected peoples’ organisations, this sample accurately reflects the reality affecting the whole population. They denounce that their region is being sacrificed for the sake of economic growth and to generate wealth for Mexican and foreign corporations and they demand that the area be declared an Environmental and Health Emergency Zone.
As for the Independencia River Basin, the communities in the north of the state of Guanajuato denounced the impacts of export-oriented agriculture (broccoli, spinach, strawberries, other berries and genetically-modified corn, among other crops) run by transnational corporations and powerful Mexican businessmen who have occupied the three branches of government for years. Not only has agribusiness drilled 3,000 deep wells, from which it extracts millions of cubic metres of water every year, but also the intensive use of agricultural chemicals has led to serious soil and water pollution. People living in the region suffer from symptoms caused by exposure to fluoride and arsenic in particular, such as: dental and skeletal fluorosis, neurological symptoms, kidney problems, kidney failure and several types of cancer. Furthermore, in San Miguel Allende, cases of lung cancer were found and attributed to prolonged exposure to potassium erionite.
The region is also under the threat of the “Cerro del Gallo” open-pit mining project in Dolores Hidalgo. SEMARNAT has rejected the permit application for now, but the interested parties could appeal the decision. The transnational corporation involved was denounced for extreme labour exploitation, as it hires individuals from indigenous communities from the south of the country as temporary workers and offers them precarious working conditions. In this region, the communities affirmed that the depletion of natural resources by the agricultural industry has forced a large number of people to migrate to the US. In the southern part of the state, where one of the country’s main industrial centres is located, the communities spoke about the impacts of the Tekchem plant where explosions of malathion in 2000 caused a toxic cloud to form, which affected people living within a several kilometre-radius. Also, they denounced the case of the Química Central de México plant. The Procuraduría Federal de Protección al Ambiente (PROFEPA or the Federal Bureau of Environmental Protection) closed the plant in 2014 and ordered the transnational corporation to remove thousands of tonnes of pollutants. In spite of this, the transnational corporation has still not complied with the order. The local people affirm that there have been increases in respiratory and immune diseases, teratogenic effects, malformations and problems caused by severe poisoning, such as headaches, sore throat, burning sensation in the eyes and vomiting.
The Mezquital Valley was another industrial paradise that the caravan visited. The eight largest cement factories in the country are located in this region (representing a quarter of all cement factories in Mexico), including one owned by the France-based transnational corporation Lafarge-Holcim. This type of industry poses a threat to the population, as it requires two highly polluting processes to function: open-pit mining and the use of heat in the industrial processing of the minerals, which generates pollution emissions. Furthermore, the factories burn garbage and various kinds of industrial waste in cement kilns, including tires, chemical products and outdated oils, among other things. Every day, dust from the kilns containing dioxins and furans cover farmers’ fields and nearby cities. The communities also mentioned the impacts generated by urban and industrial wastewater coming from Mexico City and non-metallic strip mining. To this, one must add the air emissions from a Pemex refinery, a thermoelectric plant belonging to CFE and two industrial complexes and the food processing plants of food corporations, such as Sigma Alimentos, Cargill, Barcel, Griffith, Bimbo and Compañía Cerillera la Central. The affected communities also reported that in April 2013, ATC’s agro-chemicals factory exploded five times and approximately 40,000 people showed signs of poisoning25.
During a presentation organised for the Caravan on one of the other regions that it visited, the Atoyac-ZahuapanRiver Basin, researcher Samuel Rosado26 showed a map on which he has documented the increase in the presence of US and German capital since the signing of NAFTA. Between 2011 and 2016, the automotive sector in the region grew around 60%. According to Rosado, despite the promises that the industrial corridors would create jobs for local people, the manufacturing industry in Puebla and Tlaxcala only accounts for 16% of employment.
The affected communities also affirmed that reports by CONAGUA and the Comisión Nacional de Derechos Humanos (CNDH or the National Human Rights Commission) confirm the presence of the following pollutants in the river: mercury, nickel, lead, cyanide, arsenic, copper, chromium, cadmium, zinc, toluene, dibromochloromethane, chloroform, vinyl chloride, methyl chloride, phenols, benzene compounds, nitrites and nitrates, phosphate and xylenes. Furthermore, according to the reports submitted by the Centro Fray Julián Garcés de Derechos Humanos y Desarrollo Local A.C. (Fray Julián Garcés Centre for Human Rights and Local Development A.C.) to the Red contra el Genocidio y la Impunidad en México (Network against Genocide and Impunity in Mexico), between 2002 and 2016, over 25,000 people died of cancer and 4,000 from kidney failure. They also identified more than 900 miscarriages. This network estimates that on average, in the region, one person dies every four hours from one of these causes27.
In Puebla, where another of the industrial and agroindustrial paradises visited by the Caravan is located, the affected communities denounced the overexploitation of aquifers and the high levels of pollution caused by the manufacturing, automotive (for example, Volkswagen), pork (Granjas Carroll-Smithfield), berries (Driscoll’s) and mining industries. It should be noted that this region was the epicentre of the H1N1 pandemic in 2009. It was also denounced that the plundering of local peoples’ land continues to make way for various types of megaprojects such as industrial pig farms, other export-oriented agroindustrial operations, open-pit mines and the wind farms of the Spanish corporation Iberdrola.
In the northern part of the Isthmus of Tehuantepec, the Caravan travelled to one of the oldest and most important hubs of oil and petrochemical production in Latin America, made up mainly of the Lázaro Cárdenas Refinery and the Cosoleacaque Petrochemical Complex (PC) located in Minatitlán, Veracruz. Also, in Coatzacoalcos, one finds the Cangrejera PC (where, for example, the Spanish group COBRA owned by ACS operates), the Morelos PC and the Pajaritos PC. In 2016, 32 workers died in an explosion at the Clorados III chlorine plant in the Pajaritos PC. According to the affected communities, more than 300,000 local residents were exposed to ashes from the explosion, which contained high levels of polychlorinated dioxins and furans. In addition, the region is home to the main core of industrial fossil fuel pipelines (transporting oil, gas, gasoline and petrochemicals), which are the source of the explosions and spills that occur frequently in the area of Nanchital, causing dangerous levels of contamination in the region.
In addition to the ongoing pollution of the Coatzacoalcos River caused by oil spillages in the wetlands near the large industrial centres, the affected communities informed the Caravan that the above-ground storage of coke in Jáltiplan de Morelos by the Spanish corporation García Munte (currently ADN Energía de México) generates fine dust and toxic clouds in the area, which are linked to a large number of illnesses affecting the population. What is more, they highlighted that since the plant was built in 2013, local fisherfolk have observed that the fish, turtles and other local species are dying and peasant communities have experienced losses in their fruit and vegetable crops. It was pointed out that the coking plant generates only around 20 jobs and the workers have serious health problems.
Advances in Mexico
The Caravan’s first meeting with Mexico’s Environment Minister, Víctor M. Toledo. (Photo: Martín Álvarez-Mullaly, OPSUR – #ToxiTourMexico, 11 December 2019)
The Caravan received extraordinary coverage by the Mexico’s main media outlets and other international media28.
In regard to the political impact that the Caravan generated, SEMARNAT received the results of the Caravan positively at the first meeting on 11 December 2019. The next day, on 12 December, the Environment Minister himself publicly informed the Mexican president of the results29. After the meeting, SEMARNAT issued a press release30. Then, on 21 January 2020, SEMARNAT held a second meeting with the affected communities who presented 12 proposals and committed to developing ecologic restoration programmes31. At the third meeting, on 3 March, other sectors of the government began to participate in the dialogue, such as the Ministry of Health, CONACYT, PROFEPA and Comisión Federal para la Protección contra Riesgos Sanitarios (COFEPRIS or the Federal Commission for Protection against Health Risks). Participants agreed that an inter-institutional coordination group should be created to ensure that the pollution and health problems in the environmental emergency regions (EER) are resolved. The affected communities took the opportunity to express their concern about the expansion of new megaprojects in the region, which risk aggravating the contamination, loss of biodiversity, water stress, harm to health and dispossession of land32. Finally, the fourth meeting was held on 6 May with representatives of the affected communities, the head of SEMARNAT, the Health Minister and the director of CONACYT. Held in the midst of the COVID-19 crisis, participants of the meeting highlighted the interconnection between the health of the environment and human health and the greater risk for the population in the six regions33. The next meeting will take place on 6 July 2020.
Photo: Martín Álvarez-Mullaly, OPSUR (#ToxiTourMexico, December 2019)
Both the affected communities and the international organisations that participated in the Caravan are preparing reports, which will serve as the basis for denouncing the alarming situation in Mexico at the international level. Participants have already begun to disseminate the results outside of Mexico: members of the Caravan managed to present them to the Confederación de Nacionalidades Indígenas (CONAIE or the Confederation of Indigenous Nationalities) in activities of resistance to free trade prior to the coronavirus outbreak34. A similar initiative in Argentina has been postponed to the second half of 2020, as has the affected communities’ tour of Europe and the US. To expose the public and private responsibility of the EU and intervene in the process of signing and ratifying the new EU-Mexico agreement, there are plans to hold interventions in the European Parliament, the German Parliament and the Parliament of the Basque Country, as well as public actions in France, Germany, the Spanish State and Belgium. The results will also be presented in October during the 6th Session of the Human Rights Council’s Open-ended Intergovernmental Working Group (OEIGWG), whose mandate is to elaborate a binding instrument on transnational corporations and human rights.
Finally, the organisations from the Caravan are working to consolidate the networks of solidarity with the affected communities. A new phase may be beginning in Mexico today – one in which it will be possible to fight effectively against corporate impunity – and therefore, now more than ever, it is important to pay attention to this process.
Main European transnational corporations present in the areas visited
8 The members of parliament and other international observers who participated in the Caravan were: Leïla Chaibi (MEP of France Insoumise, France, European United Left/Nordic Green Left (GUE/NGL), María Eugenia Rodríguez Palop (MEP of Podemos, the Spanish State, European United Left/Nordic Green Left (GUE/NGL), Mikel Otero (Parliament of the Basque Country, EHBildu), Patricia Torres Ray (Senator of the State of Minnesota, US), Acción Ecológica (Ecuador), Corporate Accountability (US), Ekologistak Martxan (Basque Country), Lidecs (Mexico), México vía Berlín (Germany), Multisectorial Antiextractivista / Campaña Gane Quien Gane (Argentina), Oficina Ecuménica por la Paz y la Justicia (Germany), Observatorio de Multinacionales en América Latina (Spanish State), Observatorio Petrolero del Sur (Argentina), Taula per Mèxic (Spanish State), Transnational Institute (The Netherlands), Unión de Afectado/as por Chevron Texaco (Ecuador), ZEB – Zentrum für Entwicklungsbezogene Bildung (Germany).
19 See the report submitted to SEMARNAT, the Ministry of Health and CONACYT on 6
May 2020 entitled “Zonas de sacrificio tóxico durante la pandemia del COVID 19” (Toxic zones of sacrifice during the COVID-19 pandemic).
20 Source: “Informe de la Caravana a 6 zonas de sacrificio por devastación ambiental” (Caravan report on 6 zones of sacrifice by environmental devastation), Asamblea Nacional de Afectados/as Ambientales (forthcoming).
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