March 2001: "Toxic Bob" Wastes Burma

Forced labour and pollution rampant at Canadian-owned mine
March 1, 2001

According to a recent report, Ivanhoe Mines Ltd., a Canadian company owned by Robert Friedland, is "raping the environment" and using forced labour in Burma.

Ivanhoe operates the US$90 million Monywa copper mine, Burma's largest mining investment, in a 50-50 partnership with the Burmese military dictatorship (known as the State Peace and Development Council (SPDC). The mine is the centrepiece of Friedland's corporate holdings, which include properties in the U.S., Indonesia, South Korea, Thailand, China, Australia, Fiji, Kazakhstan, Armenia, Angola, Sierra Leone and Namibia.

The report, titled Grave Diggers: A Report on Mining in Burma, was written by mining expert Roger Moody and released by MiningWatch Canada and the Canadian Friends of Burma (CFOB).

The MiningWatch press release states that the Monywa mine area has suffered "severe environmental damage," and that forced labour has been used to build roads to the mine. The drinking water near the mine-site has been polluted by copper sulphate and is so bad that local people were boiling the water and selling the copper back to the government.

People have also complained of skin irritation resulting from use of the contaminated water. Burma has no environmental laws. Copper mining has produced the greatest amount of dangerous wastes in the mining industry. One observer declared the mine-site "a safety hazard," with villagers "running all over...even during blasting." According to Moody, people have been driven from their land to facilitate the expansion of the mine under Ivanhoe.

Local people say that hundreds of villagers in the way of the mine have been forcibly relocated and their property confiscated without compensation.

Friedland and the Burmese junta form a powerful combination. Here is a Canadian mining investor linked to major environmental disasters and mercenaries joining with a military junta that killed 10,000 people in 1988 (to crush a student uprising) and has turned Burma into a vast slave labour camp, as well as the world's leading heroin exporter.

The SPDC refused to hand over power to Aung San Suu Kyi when her party won the 1990 elections and has held her under house arrest since then. According to the United Nations, torture, summary executions, slave labour, rape, forced displacement, and oppression of minorities are commonplace in Burma.

The junta has incorporated drug trafficking into the country's permanent economy, so that Burma now supplies 60% of the world's heroin and 80% of that drug sold in Canada. Under the SPDC, Burma has more than doubled drug exports.

Foreign investment is used to launder profits from the junta's drug trafficking. The money generated by heroin, foreign investment and tourism finances the SPDC's arms purchases (mainly from China) with which it maintains its iron-fisted rule.

Friedland used to share the junta's penchant for drug trafficking. In 1969, he won the nickname "Toxic Bob" when he was arrested for attempting to sell 8,000 "hits" of LSD to a narcotics agent in Portland, Maine. Police confiscated an additional 16,000 hits from Friedland and his two partners, making it the largest drug bust in the state at the time.

The International Labour Organization (ILO) virtually expelled Burma in June 1999, banning it from meetings and from receiving aid until it stops widespread forced labour, which the ILO called "nothing but a contemporary form of slavery." In November 2000, the ILO passed an unprecedented resolution on Burma which compels its 167 member countries to "cease as soon as possible any activity that could have an effect of directly or indirectly abetting the practice of forced labour."

The infrastructure for foreign investment in Burma is being built with the slave labour of an estimated 800,000 people, including many children. The 1998 ILO report on forced labour in Burma declares that it is nearly impossible for foreign companies to avoid using infrastructure made by forced labour or to work on lands not confiscated from villagers.

According to Moody, the Monywa mine "appears to lend more credibility" to Burma's junta than "any other mineral project in the country." Ivanhoe Mines pays a 2.4% royalty to the military and is set to become one of the regime's biggest sources of foreign exchange. Revenues were U.S.$9.2 million in the first quarter of 1999 at Monywa, and by August the mine had produced about 45.5 million pounds of copper at a reported cost of U.S.27 cents a pound, one of the world's lowest production costs.

Friedland is closely connected to the dictatorship. In Burma, he is represented by Vancouver businessman Reggie Tun Maung (senior vice-president of Ivanhoe Myanmar Holdings and a Burmese national), whose son is married to the daughter of SPDC Deputy Prime Minister Vice-Admiral Maung Maung Khin.

Another Friedland company, First Dynasty Mines, shares interest with the Myanmar Ministry of Mines in a 140,000-hectare block in Sagaing division. Friendland says that Burma's generals are not corrupt, but merely "pursuing enlightened forestry policies." For him, the way to "gain their approval" is by recognizing that "they love their country."

Daniel Kunz, president of Ivanhoe Mines, told the press: "There are 146 different tribes and ethnic groups [in Burma] that have been at civil war for decades and decades. It's complicated. The military government, unfortunately, is probably the only form of government that can deal with such a complex problem." Moody's report identifies mining as one of the main ways that drug money has been laundered in Burma. The regime signed ceasefire agreements with drug lords and their private armies in 1989, including the Wa and Kokang groups. Following this truce, the United Wa Army opened gem, gold and silver mines at Mongyawn and Mongshu in Shan State.

Mining towns have also become key areas for the spread of the AIDS virus, due to the presence of heroin dealers and brothels. Migrant workers become infected with the virus and carry it all over the country when they go home. Burma has one of the highest HIV infection rates in the world and is currently undergoing a serious AIDS epidemic. The SPDC spends only 0.2% of its national budget on health (compared to about 50% on the military), and the World Health Organization ranks Burma 190 out of 191 countries.

Friedland's Monywa mine investment continues his destructive trail, which already has crossed the U.S., Guyana and Sierra Leone. The U.S. Environmental Protection Agency (EPA) is suing Friedland for the cost of cleaning up cyanide pollution from the Summitville gold mine in Colorado which took place during 1985-1992. The mine, owned by a company Friedland controlled, polluted surrounding land and waterways for six years, destroying the Alamosa river. The clean-up will cost over U.S.$100 million, making Summitville "the Exxon Valdez of the mining industry."

In Guyana, the Omai gold mine in which Friedland had invested caused reportedly the biggest cyanide spill in world history. In 1995, the tailings dam at Omai burst, sending 3.2 billion litres of cyanide-filled mud into the Essequibo, Guyana's main river and its most important source of fresh water.

In Sierra Leone, Friedland's company DiamondWorks, which owns two diamond mines, has been linked to the notorious South African mercenary group Executive Outcomes (EO) made up of apartheid-era military officers who specialize in assassination and disinformation. In 1996, EO recaptured DiamondWorks' properties in Sierra Leone from rebels who had taken them over. Tony Buckingham, the head of EO and a former officer in Britain's Special Air Service (SAS), is a shareholder in DiamondWorks and was appointed to the company's board. EO used airburst explosives, which burn everyone and everything within a certain area, to retake the diamond fields.

In January 2000, Partnerships Africa Canada, a coalition of African and Canadian development groups, released a report which condemned DiamondWorks "for trying to make a profit in the midst of civil war." Partnerships pointed out that diamonds have fuelled the vicious civil war in Sierra Leone, which has been blighted by the severing of children's limbs.

The Canadian government has stopped aid to Burma, but refuses to ban investment and trade. According to Friedland, "In 1996 representatives of the company met with officials of the Canadian government in Ottawa [and] at no time did the government advise us against investing in Myanmar [Burma] or attempt to dissuade us from doing business in the country."

For Joan Kuyek, national coordinator for MiningWatch Canada, Moody's report makes it clear that Canada is complicit in maintaining the Burmese dictatorship "through its unjust tax and corporate laws."

Ivanhoe is also registered in the Yukon, where it receives generous tax breaks for foreign exploration and development. There is also no requirement in the Yukon for a corporation to have any directors resident in Canada.

Not surprisingly then, there are more Canadian mining companies in Burma than from any other foreign country. In addition to Ivanhoe and First Dynasty, the following companies have been active in Burma during 1995-2000: East Asia Gold, International Panorama Resources, Leeward Capital, Min-doro Resources, Palmer Resources, Prime Resources, Sea-Sun-Star Co./James Capel Canada, Silver Standard Resources, and Teck Corp.

Overall, Canadian corporations have invested more than $150 million in Burma. These companies include Nortel Networks, B.C. Gas, Canadian Helicopters International, Mitsubishi Canada, Ridel Resources, Reitmans, and Kilborn-SNC Lavalin (in charge of constructing the first phase of the Monywa project).

Wal-Mart Canada is importing goods from Burma for sale in its stores. One of its suppliers is a company owned by Lo Hsing-han, an infamous drug trafficker.

Aung San Suu Kyi and the CFOB have called for full economic sanctions that would ban all trade with and investment in Burma. As Suu Kyi puts it, "Foreign investment and tourism are shoring up the power of the Burmese junta, and the world must realize the scale of Burma's human rights abuses."

(Asad Ismi has written extensively on global economic and political issues. For more of his reports and articles, visit