The Globe and Mail
Published Thursday, Jul. 25 2013, 8:00 AM EDT
Last updated Thursday, Jul. 25 2013, 8:00 AM EDT

The landmark decision by the Ontario Supreme Court to hear a lawsuit brought by the victims and family members of alleged violence at a
Guatemalan mine owned by Canadian mining company HudBay Minerals Inc. has the legal community scrambling to find out how it changes the game for Canadian companies that operate overseas.

“I got about three e-mails from partners about it on Monday, they had seen it in the paper, saying basically … ‘what do we make of this?’”
said David Kent, a partner with law firm McMillan LLP.

Justice Carole Brown on Monday threw out HudBay’s motion to dismiss the case. The motion argued the parent company couldn’t be held liable for the actions of its subsidiary.

Lawyers for the 13 Guatemalans that brought the case are seeking $67-million in damages from HudBay, alleging security personnel working
for its Guatemalan subsidiary, Compania Guatemalteca de Niquel, raped 11 woman during a forced eviction of a Mayan village in 2007. They also
claim that in September, 2009, mine security guards killed a local Mayan activist who opposed the company’s Fenix nickel mine in eastern
Guatemala and shot another man, leaving him paralyzed from the chest down.

HudBay has denied the allegations, which have not been proven in court. HudBay hasn’t decided if it will appeal the ruling, said Robert
Harrison, one of the HudBay’s lawyers.

Shin Imai, an associate professor at York University’s Osgoode Hall Law School, expects the company to appeal, although he doesn’t think it is
likely to succeed.

“This idea that a parent company has no responsibility – that’s what they say, ‘that there’s no recognized duty of care owed for what happens
with a subsidiary,’ I mean the trains left the station on that,” said Mr. Imai. “I just can’t imagine any court saying, ‘yeah that’s right,
Canadian companies aren’t responsible for what happens overseas even though they’re making profits from those operations.’”

But the opinion of the legal community is mixed.

But Chris Baldwin, a lawyer with Lawson Lundell LLP, doesn’t see this latest development as all that extraordinary.

The decision rests on some basic Canadian legal principles, since it’s HudBay and not its foreign subsidiary that is being accused in Canada,
said Mr. Baldwin.

Having this case go to trial, most legal experts agree, could mean that Canadian mining firms will face more legal challenges from individuals
and communities affected by their overseas operations.

It’s a proposition that HudBay argued would open the door to “meritless” cases against mining companies.

But that’s a spurious argument, said Cory Wanless, one of the lawyers representing the Guatemalans.

“Essentially the Canadian mining industry wants different rules for itself than the rules that apply for everyone else,” said Mr. Wanless.

“All our clients have been asking from Day 1 is a chance to bring it to court,” he said.

Guatemalan complainants celebrate effective suspension of Tahoe Resources license

Ottawa/Guatemala City, July 25, 2013: Early this week, the Civil and Mercantile Division of Guatemala’s First Court of Appeals notified the
Centre for Environmental and Social Legal Action (CALAS) that it is upholding an appeal associated with Tahoe Resources  production licence for the Escobal project.

Quelvin Jimenez of the indigenous Xinka Parliament presented the appeal in May with legal support from CALAS, claiming lack of due process
regarding a complaint he filed against the company’s licence prior to it being granted on April 3, 2013. The Xinca Parliament, the San Rafael Las
Flores Committee in Defence of Life and Peace, and the Santa Rosa Diocese Council for the Defence of Nature (CODIDENA) supported the
appeal process.

The Appeals Court found in favour of Jimenez and ordered the Ministry of Energy and Mines to adequately attend to his complaint, which was based on concerns over negative impacts on water supplies in the area of Tahoe’s Escobal silver project, currently under construction.

CALAS lawyer Rafael Maldonaldo remarked, “This is a historic sentence for the rights of all Guatemalans. The decision means the suspension of
Tahoe Resources’ exploitation licence, preventing the company from putting the mine into production.”

Since November 2011, Jimenez and more than 200 other affected community members presented formal objections to Tahoe’s request for a licence from the Ministry of Energy and Mines. Less than an hour before the Ministry announced that it had granted Tahoe its license, Jimenez and
others were notified that their objections would not be heard.

Jimenez regards the decision as a sign of hope for the affected communities where tensions have run high in recent months. During a
press conference Wednesday morning he remarked, “The only thing the Escobal mine is currently producing in the area is conflict.”

Tahoe Resources’ Escobal mine has been mired in controversy given broad community opposition and incidents of violence, the most recent of which has been linked to company personnel. Then Security Manager of the  Escobal mine, Alberto Rotondo, is under house arrest awaiting trial for alleged participation in an April 27 shooting <>
against people protesting outside the mine that left six wounded.

Goldcorp owned the Escobal silver project until 2010 and currently holds 40% of Tahoe Resources’ common shares. Most of
Tahoe’s directors have prior or current connections back to the gold producer whose Marlin mine in northwestern Guatemala has been a site of
ongoing conflict, given lack of respect for community consent and concerns over impacts on water supplies and the health of indigenous

For a summary of issues related to Tahoe’s Escobal project see the following Investor Alert here.


* Rafael Maldonado, Centre for Environmental and Social Legal Action
(CALAS), (502) 5307 4250
* Jen Moore, Latin America Program Coordinator, MiningWatch Canada,
(613) 569-3439
* Lisa Rankin, Coordinator, Maritimes-Guatemala Breaking the Silence
Network, (502) 5071 4164