A deal between North American Tungsten Ltd. and China may have paved the way for the production of weapons of war, violation of human rights and environmental degradation, say critics.
The deal was signed last month between the publicly traded, Vancouver-based corporation and Hunan Nonferrous Metals, the largest nonferrous producer in China.
It gives Hunan 9.9 per cent of the company, one of seven seats on the board, and 30 days to match any financing deal North American Tungsten may seek to make with a bank.
The Yukon government “played a major role” in sealing the deal, said Economic Development Minister Jim Kenyon, whose been on several trade missions to China in the past two years.
“The bottom line is keeping those cash registers ringing,” said NDP leader Todd Hardy in the legislature Tuesday.
“So what if people are dying? So what if the global environment is taking a beating from China’s air pollution? All that counts with this government, by their actions, is making deals and attracting investment.”
Yukon tungsten could easily be used by the Chinese to construct arms that are then sold to countries such as Darfur, said Hardy.
Fentie did not return calls asking what attempts were made to bring China’s human rights and environmental records to the bargaining table, nor to ascertain the intended use of tungsten destined for China.
Although it does not support human rights abuses, the Yukon government has no intention of compromising future economic development made possible by Chinese investment, said Fentie in the legislature on Tuesday.
“I would suggest to the member opposite any time he goes into Wal-Mart, Canadian Tire and other stores, that he takes a very close look at where a huge percentage of all goods that are in those stores is made,” he said.
“If the member wants to take a position that we should chase any investment from China out of Yukon and out of Canada, say so.
“If the member wants to say that stores like Canadian Tire and Wal-Mart should send all their goods back to where they were made, he should say so.”
Human rights and trade are separate issues, said Fentie.
He deferred to the federal government, saying it is up to the prime minister to take the lead on trade policy and relations with China.
But that is passing the buck, said Hardy.
Amnesty International agrees.
“If you’re in a position to make a decision about something, about a trade arrangement or deal, then you have responsibilities to make sure that human rights are being considered, that they are raised and are on the table,” said Don Wright, Amnesty International regional development co-ordinator for BC and Yukon.
“You can insist on pushing practices towards greater human rights … Certainly we would expect that it be treated as a central issue.”
Through its Share Power campaign, Amnesty also calls on shareholders to advocate for ethical labour and company practices, respect for human rights and regard for the impact on local communities and the environment.
“We don’t ask people to divest (themselves) of companies that are problematic, but to use their voice as a shareholder to push those companies,” said Wright.
North American Tungsten does not sell to Hunan, said company President Stephen Leahy in a telephone interview from his Vancouver office.
However, he estimates about one third of the tungsten pulled from the mine, 95 per cent of which sits on the Yukon side of the Yukon/Northwest Territories border, is sold to China itself.
“If they own the company, and they get the materials out; they do whatever they want with it,” said Hardy.
If Canada maintains majority ownership, it maintains control, he said.
Although there is one shareholder with a greater controlling interest than Hunan, Leahy had no “breakdown of the geographical” origin of shareholders.
Other foreign investors are American and European, he said, adding no others “that he knows of” are Chinese.
The company website does not report its shareholders, nor was the information available through the Toronto Stock Exchange.
A pie chart displays uses of the tungsten produced in only basic terms like mill products, hard metals and steel or alloys.
Four years ago, Leahy told the News North American Tungsten was eyeing “new markets” in armaments.
Today, he insists his customers use 80 per cent of the hardening metal for cutting tools, and the balance for electronics, calling the military application “extremely small.”
The corporation is still considering the construction of a smelter refinery in close proximity to the deposit, pending the outcome of a feasibility study and the success in raising the necessary capital, said Leahy, who acknowledged a shortage of labour as another potential hurdle.
But if Hunan now has a major interest in North American Tungsten, it could attempt to exert influence over the company’s hiring and labour practices.
This was recently the case in Fort McMurray, Alberta, when a Chinese oil giant tried to import its own workers.
“They wanted to bring in those guest workers to pay them a pittance, to create another tier of workers in the oil patch” said Joel Harden, researcher for the Canadian Labour Congress.
“They (the oilworkers’ union) fought them, and they won. The Chinese National Oil Company responded in utter bewilderment. They’d never run into this before.”
“The employment of foreign workers was not part of the deal struck with Hunan, nor are there any plans to do so,” said Leahy.
Economic Development took two separate trade missions to China last year.
Another is planned for November.
“If you want genuine economic development and really lasting security and prosperity, human rights has to be at the centre of those discussions, at the centre of agreements, and not thought of as something that maybe would be added on later” said Wright.
“That’s a recipe for continuing violations of human rights and, eventually, that will have an impact on economic prosperity.”