First I would like to say that Barrick should have given more of the profits to the Dominican but the fact is they didn’t and the contract is binding. The gov’t has to bite the bullet and settle with the 300-400million or more a year for the next 25 years. </SPAN>
That said, I want to defend Barrick a little here. First off Suarezen, Im sorry that this is happening in your back yard but it has to happen in somebodies. However, you are wrong when you say there is no risk. There is always risk in mining and exploration. First of all, the reserves they are talking about are not all proven. A percentage of those reserves are only probable. There is no guarantee that the quality or density of those reserves will surmount to the estimated profits. Companies have to show the numbers of proven and probable reserves in order to attain the rights to mine this also increases stock value so the higher the better. Underestimating would be counter-productive. </SPAN>
Second as noted by CC there is a political risk which is exactly what Barrick is facing now. If a new contract is signed they lose stock value and profits, possibly even the contract and all the money they have invested. I have witnessed politics completely shut down operations and seen major oil companies lose billion dollar contracts and 100’s of millions in investment. While working in Mexico the govt signed a contract with an oil company to drill and produce nearly a 1000 wells. However, before they would pay the company they had to put the wells into production. At this point the government refused to give explosion permits for the company to perforate the wells and put them into production thus avoiding payment. </SPAN>
I am currently witnessing local labour cost major companies millions of dollars over in Africa. The locals have gone on strike demanding equal wages to that of the expats. A completely unreasonable demand considering the labour force is unskilled nor does it reflect a fair wage compared to the rest of their own country. The final financial effects of these strikes has yet to be seen.</SPAN>
Im not saying that Barrick has not done anything wrong. Im just saying, that in a way, the Dominican government and the people should feel a little lucky that a company like Barrick is doing this work. They are not the biggest gold mining company in the world for nothing. They bring the latest technology and from my experience Canadian companies have higher than average standards then most of the world. Their safety records are at the top and environmental care is always a top consideration. They do this because they have to. They are held accountable by their share holders and to International Finance Corporation who lent them the money. Job related injuries, environmental contamination and disasters cost companies millions sometimes billions of dollars (BP oil spill) so it’s in their bottom line interests to ensure higher standards are met. It doesn’t matter where in the world I work anymore safety and environment are put as high priority compared to 20 years ago. If it isn't Barrick it would be someone else, and who is to say the other company would or will be any better. </SPAN>
Until the world shuts down the demand for natural resources and minerals these things will always be an issue. Lobbyist groups help to act as a check and balance to ensure the companies follow the rules and I whole heartedly agree with them. We can all do our own part to keep these companies (not just resource companies, Coke, Nike, etc..are aslo guilty of exploitation) in check. If you still feel like they are the greatest evil then stop using their products! However, when a government tries to manipulate the people to renege on a contract something is terribly wrong . As mentioned before it would also be a huge detriment to future foreign investment of any kind to the Dominican Republic. </SPAN>