OTTAWA, ON, July 29, 2021 /CNW/ - In a complaint to
the Ontario Securities Commission, an international coalition of
civil society organizations calls attention to the repeated
dissemination of misleading information by Belo Sun Mining
Corp (TSXV: BSX), including statements by CEO Peter Tagliamonte, downplaying
socio-environmental, legal, and financial risks of the company's
"Volta Grande" project along the Xingu River.
Canadian-based mining company Belo Sun Corp.(TSXV: BSX) is
disseminating misleading and incomplete information to investors
about the mining project it is trying to develop on the Xingu river
(Volta Grande do Xingu), Pará State, Brazil.
This is the central message of a warning letter sent to the
Ontario Securities Commission (OSC) on July
29rd by an international coalition of civil society
organizations and networks including Amazon Watch, Earthworks,
Instituto Socioambiental (ISA), Interamerican Association for
Environmental Defense (AIDA), International Rivers, MiningWatch
Canada, Movimento Xingu Vivo para Sempre and Rede
Xingu+. The OSC is an independent Canadian Crown corporation
responsible for protecting shareholders and investors from unfair,
improper and fraudulent practices from companies and
industries.
Drafted by a legal team and supported by independent technical
and scientific analysis, the complaint letter challenges recent
statements by Belo Sun's CEO
Peter Tagliamonte. In a speech at
the Prospectors & Developers Association of Canada (PDAC) event in March 2021, the largest mining convention in the
world, Tagliamonte cited the Covid-19 pandemic as the justification
for repeated delays in the environmental licencing of the Volta
Grande mine, claiming that the mining project was "fully
authorized" and that construction was expected to begin at the end
of 2021. Similar comments have been made in recent company
statements, and by Tagliamonte himself in other occasions.
According to the complaint, such declarations are patently
false. There are seven public civil actions active in Brazilian
courts asking for the suspension of permits and of the licencing
process, filed by Federal and State public prosecutors' and
defenders' offices. These lawsuits focus specifically on
irregularities in the Environmental Impact Assessment (EIA), and
the lack of free, prior and informed consultation and consent with
Indigenous peoples and other traditional communities.
The coalition argues that there is overwhelming evidence that
Belo Sun breached the Securities Act
disclosure requirements, which requires companies to disclose
material changes "forthwith" (without delay). Companies must
disclose factual and updated data to keep investors well
informed.
Misleading information disclosed by Belo Sun Mining
Corp.
According to the complaint, while the company acknowledges the
generic risks associated with the licensing process, it fails to
disclose the concrete details of the legal actions and suspensions
in play regarding its project, relying on investors' lack of
knowledge concerning licensing legislation in Brazil.
One example refers specifically to the suspension of its
construction licence (LI), due to the lack of "free and informed
consultation" of Indigenous peoples. In its more recent Corporate
Update, Belo Sun states that "it
continues to advance financial discussions with various groups in
preparation for the commencement of construction following the
lifting of the suspension of the construction license (LI)".
"The company has not even started a consultation process, -
which is now delayed by COVID-19 - and it is already advertising
the lifting of the suspension, as if it was just a matter of time",
says Marcella Ribeiro, attorney from
AIDA's Human Rights and the Environment Program. "The company is
not in a position to guarantee the results of the consultation
process, as negotiations around consent are time-consuming and will
invariably result in major material changes to the project. None of
that is being disclosed properly to investors", she adds.
Among the risks associated with investments in Belo Sun, the
complaint highlights the history of judicial proceedings; conflict
around the project; the flaws and gaps in the environmental impact
assessment; and the violation of the Indigenous Peoples' right to
prior consultation.
The downplaying of environmental and social risks by the
company's studies and impact assessments has sounded the alarm
among communities in the Volta Grande region, already affected by
the Belo Monte dam. A series of independent technical studies
challenge Belo Sun's statements
regarding impacts to water resources, to fauna and flora, and
regarding dam safety.
The company's refusal to acknowledge impacts in Indigenous
territories along the Xingu river has led to the court decision
that suspended the installation licence of the Volta Grande project
in 2017 until "free and informed consultation" was carried out.
There are also increasing accounts of intimidation and harassment
against project opponents, which demonstrate a much more complex
and contentious situation as a result of the project than what has
been disclosed by the company, the complaint stresses.
The coalition concludes that "Belo
Sun has failed to fully communicate to current and potential
investors about the complex nature of its project" which has a
"direct implication for delays, and raises fundamental questions
about the project's viability". The letter delivered to the
OSC aims to increase visibility to the many irregularities of the
project and to raise awareness among current and potential
investors about the major reputational and legal risks attached to
the project, at a moment when heightened attention is focused on
the Amazon rainforest and its capacity to provide environmental
services and mitigate climate change.
About Belo Sun's Volta Grande
Project
Proposed for development along the Volta Grande (Big Bend), a
stretch of the Xingu River (a major tributary of the Amazon) that
is one of the most biodiverse locations on the planet, Belo Sun's project would be the largest open pit
gold mine in Brazil. The region is
home to indigenous people such as Juruna (Yudjá), Arara, and
Xikrin, along other isolated Indigenous and riverside
communities.
From the outset, Belo Sun has
faced numerous lawsuits regarding the Volta Grande Project filed by
the Federal Public Prosecutor's Office, the State Public
Prosecutor's Office, the State Public Defender's Office, and the
Union Public Defender's Office. All of these lawsuits refer to the
multiple flaws in its licensing process and in the project's
technical studies. Among other things, the lawsuits seek the
cancellation of the company's licences and the suspension of the
project's licensing process. One of them resulted in a court
decision, still valid, to suspend Belo
Sun's construction licence.
SOURCE MiningWatch Canada
