Can Extractive Industries Promote Sustainable Development? A Net Benefits Framework and a Case Study of the Marlin Mine in Guatemala

Abstract

This article develops a framework to evaluate net benefits from mining and utilizes it to assess the Marlin mine in Guatemala. The framework integrates “weak” and “strong” sustainability principles. Under weak sustainability, a net gain in human welfare can substitute for the loss of nonrenewable resources. Under strong sustainability, nature’s life-support systems are not substitutable. We define “net benefits” as the joint generation of net gains to human welfare, defined as local acceptance and high economic benefits, and low risks to the resilience of environmental life-support systems, especially water, evidenced by best practice management standards. We find little evidence that the Marlin mine meets either weak or strong sustainability criteria: there is strong local resistance to the mine and economic benefits are low, while environmental risk is high, especially in terms of potential long-term contamination of life-supporting ground and surface water.

Business-Community Relationships for Extractive Industries: A Case Study in Peru

“…Both the mining and hydrocarbon extractive industries have created social and environmental impacts that affect rural communities in many places, resulting in social conflicts that harm the communities in many ways, including loss of human life, the trampling of citizen rights, and irreparable environmental pollution (Bebbington, 2013;Davis & Franks, 2014;Zarsky & Stanley, 2013). For companies, the consequences were production overruns, declining investment, and bad corporate image.…”

From Economic General Equilibrium to Ecological System Services for Nature Conservation and Management: A Methodological Analysis and an Empirical Study Based on 30 Italian Industries

“…The main strengths of the methodology developed in this paper are that: 1. The same methodology could be applied at a local level, to check for the sustainability of individual cities (e.g., Mori & Christodoulou, 2012), at a regional level (e.g., Rodrigues-Filho et al, 2013;van Zeijl-Rozema, 2011), or at an industrial level (e.g., Garmendia et al, 2010;Zarsky & Stanley, 2013). 2.…”

Mining, Taxes, and Development in Guatemala: The State and the Marlin Mine

“…Based on the profile of the Department, royalties to the municipalities seem to have had little effect in terms of elevating the social and economic status of the region as a whole. In their study, Zarsky and Stanley (, p. 141) hint that corruption my account for some of this lack of progress, as they report that the community members suspect that the “royalties are used to support housing construction and other consumption by local officials.” The media has lent credence, suggesting that the resources are being directed to political campaigns of local politicians (see Prensa Libre , ).…”

“…The investigation focuses on the Marlin mine (hereafter referred to as Marlin, Montana, or Goldcorp), owned by Montana Exploradora, S.A., a wholly owned subsidiary of Canada's mining giant, Goldcorp Inc. Whereas other studies on Marlin, such as those done by Zarsky and Stanley () and ASIES (), were comprehensive overviews of the effects of the mine, this investigation is more modest in scope. Incorporating data not available to the earlier studies, its emphasis is on assessing the company's claims regarding only its tax and royalty payments.…”