Article Human Rights & Press Freedom

Violence in Mexico: where corporations and human rights collide

The current Mexican president has declared his country open for business, but how do companies negotiate Mexico’s alarming human rights record?

Torture, extrajudicial killings and forced disappearances have risen dramatically in Mexico over the past decade. Amnesty International (AI) recently described “a prevailing culture of tolerance and impunity for torture” in Mexico.

Looking back over 2014, AI reports: “Impunity for human rights violations and ordinary crimes remained the norm… Many human rights defenders and journalists were threatened, attacked or killed in reprisal for their legitimate work. No perpetrators were known to have been identified or brought to justice.”

Yet despite having an atrocious human rights record, foreign businesses flock to Mexico in search of low wages and favourable tax breaks. The largest industries in Mexico include mining, manufacturing and tourism, all of which attract significant foreign investment to the country.

While many economic and trade publications warn about the security risks in Mexico, countless foreign companies have become either directly or indirectly involved in Mexico’s ongoing human rights crisis. Human rights risks may stem from the business practices themselves, as is often the case with the extractive industries, or from the broader context in which the company operates. The latter may include conflict, corruption or weak governance, all of which are commonly found in Mexico.

Mexico’s burgeoning mining sector

Mexico has become a hotspot for foreign mining investment over the past decade, with $2.7bn invested in 2012. However, several events this year alone highlight that insecurity and violence are still part of the price of doing business in Mexico.

In February 2015, several workers at Canadian company Torex Gold’s mine in Guerrero state were kidnapped by assailants disguised as soldiers. One mine employee was shot in the leg, but the captives were fortunate to escape with their lives.

Weeks later, four employees of Canadian mining giant Goldcorp were abducted in Guerrero. Three of their bodies were later found in a mass grave. Then, last month, armed robbers seized more than $10m of gold from Canadian-based McEwan Mining’s operations in Sinaloa state.

Large-scale robberies, abductions and gruesome murders in Mexico are often pinned on organised crime syndicates. Many so-called drug cartels actually have diverse business interests and are increasingly competing with legal companies in industries like mining.

Large-scale robberies, abductions and gruesome murders in Mexico are often pinned on organised crime syndicates.

Some mining executives admit to consulting with drug cartels before working in certain areas. “That’s not to say there’s any collusion or cooperation, but that’s just the reality in a lot of areas,” says Bob Archer of Canadian mining company Great Panther.

Arcelor Mittal, a leading steel manufacturer headquartered in Luxembourg, has been stung by working in close proximity to narco territory.

In an effort to combat illegal mining on its sites, Arcelor Mittal negotiated an agreement to pay locals for mined hematite. However, tensions escalated when the company ended the agreement in December 2013. Five months later, top Arcelor Mittal executive Virgilio Camacho was abducted and killed by a single gunshot to the head.

“Former and current Mexican intelligence officials believe the murder was the work of a local and powerful drug cartel,” the Wall Street Journal reports, referring to the Knights Templar. “That would make Mr Camacho the highest-ranking executive of a foreign company to have been assassinated by an organised crime group.”

The Knights Templar reportedly earns tens of millions of dollars each year from mining illegally on Arcelor Mittal’s concessions. The cartel has considerable power locally, at one point even controlling the region’s major port.

“At least a dozen of the community leaders who had negotiated with Arcelor Mittal were identified by Mexican intelligence as members of organised crime, including members of the Templars,” the Wall Street Journal continues. “A spokeswoman for Arcelor Mittal said the company ‘was not aware of any such links and would not have made such an agreement if we had been’.”

Arcelor Mittal acquired the Michoacán mine six years prior to Camacho’s death. It is remarkable the company was unaware of the influence the Templars exert on local life, or of their involvement in illegal mining.

There are many cases of foreign mining companies being either directly or indirectly involved in situations with grave human rights abuses across the continent.

“Extractive industries are increasingly becoming the main source of socioenvironmental conflict throughout Latin America, as related to corporate complicity in human rights abuses,” writes Argentine academic Marcelo Saguier. “In the mining sector alone, there are presently 161 conflicts that affect 212 communities in relation to 254 companies.”

The human cost of free trade

Maquiladoras are Mexican factories located in free trade zones (FTZ). They manufacture anything from apparel to automobiles, electronics to defence equipment. FTZs allow factories to import materials and equipment without attracting duty or tariffs. The goods are then exported, often back to the country where the materials came from.

The maquiladora programme, launched in the 1960s, was designed to provide US companies with sweatshop labour. The sector exploded after the signing of the North American Free Trade Agreement (NAFTA) in 1994, as businesses dashed south to take advantage of Mexico’s low wages.

“Almost all of America’s largest and best known companies have some sort of manufacturing operation or subsidiary in Mexico. These include the auto industry giants like GM, Ford and Chrysler, and most of their suppliers,” explains Maquila Properties, which provides assistance to companies looking to establish factories in Mexico. “There are over 2,000 US manufacturers directly operating maquilas.”

There is a high human cost to this cheap supply of labour. Workers are often subjected to unsafe and unsanitary working conditions. The majority are young women, who are often pushed into this type of work by poverty.

Maquilas (another name for the factories) are predominantly located on the Mexico-US border, although they have also made significant incursions into Mexico’s interior. The factories, whether Mexican-owned or subsidiaries of foreign multinational companies, all contract with foreign firms to obtain inputs and export outputs.

There is a high human cost to this cheap supply of labour. Workers are often subjected to unsafe and unsanitary working conditions. The majority of workers in this sector are young women, who are often pushed into this type of work by poverty.

The case of Ciudad Juárez

Ciudad Juárez, a city of 1.3m people located across the border from El Paso, Texas, has suffered an epidemic of female homicides since the early 1990s. Hundreds of thousands of women have migrated to Juárez in search of work. Tragically, many of the murder victims have been maquiladora workers.

In Juárez, many female maquila employees work shifts, going to work or coming home in the dark. They are vulnerable to attack and kidnap because of low wages that cannot always cover public transport costs and poor safety conditions, such as lack of lighting and police patrols.

Dozens of Fortune 500 companies are represented among the more than 300 maquiladora factories in Juárez. It seems operating in close proximity to rampant crime is not necessarily bad for business, even with astonishingly high rates of impunity for murder of the city’s female workers.

“Since last year, the maquiladora sector in Ciudad Juárez has been experiencing exponential growth, breaking job creation records,” writes Mexican periodical El Diario, “and 2015 started with the same momentum, as more plants are being built and more companies become interested in setting up in Juárez.”

Perhaps unsurprisingly, the factory owners who have rushed to Juárez for its cheap labour and low tariffs have said little about the murders, rapes and abductions. With high turnover rates and many factory workers classed as temporary or casual employees, many corporations do not see a “business case” for improving the situation when employees can be easily replaced.

“The construction of working women as ‘cheap labour’ and disposable within the system makes it possible, and perhaps acceptable, to kill them with impunity,” writes academic Jessica Livingston. “While multinational corporations profit from the maquiladoras in Juárez, the murdered women and their families bear the cost of global capitalism.”

A business case for human rights?

“The responsibility to respect human rights is a global standard of expected conduct for all business enterprises wherever they operate,” states the UN’s ‘Protect, Respect and Remedy’ framework. “It exists independently of states’ abilities and/or willingness to fulfil their own human rights obligations. It exists over and above compliance with national laws and regulations protecting human rights.”

Foreign mining companies in Mexico increasingly recognise violence and insecurity as potential business risks.

“In recent years, criminal activity and violence has increased in Mexico … Violence between the drug cartels and human trafficking organisations and violent confrontations with authorities has steadily increased,” reads mining giant Goldcorp’s 2014 Annual Report. “Goldcorp’s sites have taken a variety of measures to protect their employees, property and production facilities from these security risks.”

Although Goldcorp does not specify what measures it has taken, it does say criminal activity has at times affected it employees. This now includes the murder of three employees in March 2015. However, many manufacturing companies, including Bosch, General Motors and Sony, inexplicably do not identify these same issues in their public filings.

Civil society has always had a large role to play in holding corporations to account in Mexico. Protests and community blockades are commonplace when mining companies are seen to be involved in human rights or environmental abuses. The manufacturing industry has also faced protests over working conditions and barriers to union organising.

Many maquiladoras could be prime targets for NGO or trade union campaigns about workers rights. Internationally, we have seen several high-profile campaigns about the problems with manufacturing in countries like Bangladesh, following the 2013 Rana Plaza collapse, and China, where Foxconn’s appalling working conditions have led to employee riots and a spate of attempted suicides. Foxconn also has factories in Mexico.

Foxconn’s appalling working conditions in China have led to employee riots and a spate of attempted suicides. It also has factories in Mexico.

While NGOs and the public are vital for the advancement of human rights, violence and impunity in Mexico hinder the ability to speak out about corporate or government abuses. Where groups or communities are unable to organize and express themselves, there is a high risk they will not be able to defend their human rights.

“Individually, [human] rights holders may be able to call attention to rights violations, but it is when they come together collectively to express, promote, pursue and defend common interests that they are most likely to be heard,” says Jim Baker of the Council of Global Unions. “That ‘coming together’, that shift from being victims to being actors, is through the exercise of freedom of association; a right closely linked with the right of assembly and freedom of expression.”

Baker argues that while there are compelling business reasons for addressing human rights risks, companies should still act when a business case does not exist. It is possible this will only happen through a vigilant partnership between the government, the general public and the companies that wish to keep taking advantage of Mexico’s low wages.

There are many practical steps businesses can take, such as increasing wages or improving security and worker transport, that would leave employees less vulnerable. Companies could also engage meaningfully with local communities affected by their operations and take appropriate action when there are threats of human rights violations.

Will this make Mexico less appealing to foreign companies? The real question should be whether saving a few dollars is worth the cost of human life.

Jen Wilton is a researcher and journalist who has written extensively about human rights and environmental issues in Mexico and Latin America. She tweets as @guerillagrrl and blogs at Revolution Is Eternal.

Photo by 16:9Clue

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