The withdrawal of a key player from a Human Rights Impact Assessment (HRIA) of a gold mining operation in Guatemala is causing concern among ethical investors of Goldcorp, one of the largest gold mining companies in the world.

The HRIA, paid for by the Canadian company, was set up last year in response to growing worries among ethical investors that Goldcorp’s Marlin Mine was creating tension among Mayan Indian communities in the western highlands of Guatemala.

Goldcorp is operating in a country that was torn by decades of civil war. Nearly a quarter of a million were killed, one million displaced, almost all of them indigenous Mayan.

What happened in those years has been recognised by the United Nations as genocide.

The peace accord of 1996 opened the country to big development projects like the Goldcorp mine which, after several years of exploration, began operating in 2005 and currently employs 1,200 people.

Goldcorp has been accused by some Guatemalan campaign groups and NGOs of unfair land purchase practices, human rights violations and environmental damage to the area surrounding the mine.

Critics also say the company is taking huge amounts of profit out of impoverished Mayan communities and putting very little back in.

Goldcorp continues to emphatically reject all those claims.

Tranished

But on 18 March, a week after the BBC revealed doubts about the independence of the Goldcorp review,
, the Public Service Alliance of Canada (PSAC) abruptly pulled out of the HRIA.

In a statement the PSAC, one of Canada’s biggest unions, said:

“PSAC has become increasingly concerned with the HRIA process and its relationship with the local communities.

“We have been especially concerned about the lack of free and informed prior consent of the communities in regards to the HRIA, and that the interests of Goldcorp are being put before the interests of the local people.”

John Gordon, PSAC’s national president, told the BBC: “(The HRIA) was a problem area and it wasn’t good for our union to be involved.”

Expressing concern that increasingly PSAC was being seen as an apologist for the mine Mr Gordon said, “Our reputation in the area of social justice was being tarnished.”

Concern

Goldcorp’s Jeff Wilhoit, Vice President Investor Relations said that other shareholder groups including two large Swedish pension funds, were not withdrawing from the HRIA. “They have reaffirmed their commitment,” he said.

Mr Wilhoit continued “We are working within the letter of this process and we believe it will result in a product that is transparent and effective.”

Asked if he was concerned about PSAC’s reasons for withdrawing, Mr Wilhoit said: “We are concerned about all our investors.”

Arne Loow of the Fourth National Swedish Pension Fund said his group would stick with the HRIA. “We will continue to support it as long as we see that a dialogue is possible,” he said.

He was critical, though, of the way relations with the local communities had been handled.

But Mr Loow argued it would be wrong to leave since “it would reduce our possibilities to both improve conditions for the local community and influence Goldcorp”.

Bob Walker an executive with the Ethical Funds Company which also invests for its clients in Goldcorp confirmed that his company too is staying in.

However, he acknowledged that the loss of PSAC was a blow.

He told me that the HRIA had had the unintended consequence of “inflaming the situation” in Guatemala.

Pointing to legislation before the Guatemalan Congress and a new HRIA that has been commissioned by the Roman Catholic Church there, Mr Walker thought the time might be right to “take a break.”

“The debate is shifting,” he said adding, “we are watching with interest and concern.”

Bill Law is a reporter for BBC Radio 4’s. He first visited the mine in Sipacapa, Guatemala in 2008.