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Ontario court rules Guatemalan lawsuits against HudBay can go to trial in Cda

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TORONTO - Three lawsuits against a Canadian mining company over alleged shootings and gang rapes at a Guatemalan project will be allowed to proceed in Canada following a ruling that makes it possible for firms to face liability at home for incidents that occur overseas.

Lawyers for the plaintiffs, 13 Mayan Guatemalans, said the decision is a "wake-up call" for Canadian companies about their responsibilities at foreign mining projects.

"This step in the case uses existing legal rules that have not been applied in this way before," lawyer Murray Klippenstein said in an interview Tuesday.

"Mining companies, and maybe other companies operating abroad, need to take a very, very, serious look at the possibility or likelihood that shenanigans abroad that they thought would never result in liability may result in accountability in Canadian courts."

The suits allege that security personnel, along with members of the police and military, attacked and raped 11 women in 2007 who were forcibly removed from their village in relation to the Fenix project.

Two related lawsuits seek to hold HudBay Minerals Inc. (TSX:HBM) and a subsidiary responsible for the subsequent killing of community leader Adolfo Ich as a result of a land dispute and the shooting and paralysis of local resident German Chub.

HudBay, which didn't own the mining operations when most of the alleged incidents occurred, has said the accusations contradict available information and that it would defend itself "vigorously against them.''

None of the allegations have been proven in court.

The Toronto-based company bought the Fenix project nickel mine in Guatemala in a corporate takeover of Skye Resources in 2008, but sold it in 2011 to Russian firm Solway Investment Group to focus on its Canadian and Peruvian projects.

HudBay spokesman John Vincic said the ruling does not involve any determination of the merits of the case.

"It also did not consider the likelihood that the plaintiffs would be able to establish the facts they are alleging," he wrote in an email. "After having an opportunity to cross-examine the plaintiffs, we are confident that their allegations are untrue and the cases will be favourably resolved on the merits at trial."

The company has said on its website that it "does not believe the allegations that sexual assaults occurred during (the) evictions is credible and no complaints of this nature have been filed with the authorities in Guatemala."

It also says that "according to the prosecutor and police reports... the evictions were carried out peacefully and without any injuries," and denies that any of its personnel was involved in Ich's death in 2009.

"HudBay takes its role as a corporate citizen seriously and respects and protects human rights wherever HudBay operates," the site says.

It denies any responsibility and is relying on the legal defence that a parent company is not responsible for the actions of its subsidiary.

But Klippenstein doesn't believe that applies in this case because "the reality seems to be that the parent company in fact controls on the ground operations," he said.

A lot of those accused in committing the offences "were hired by HudBay or its subsidiary with the direct involvement from Canada and without any kind of reasonable safeguards or supervision," Klippenstein said.

"Many of the security people were unlicensed and carried unlicensed guns. The situation was just loaded for violence."

HudBay, he notes, did own the mine "during some of the events so we say they had direct on-the-ground involvement and responsibility for some of the events."

"Some events were under the control of the company that they purchased, so they purchased the legal liabilities with the package," Klippenstein added.

In her decision, Superior Court of Ontario Justice Carole Brown ruled Monday that the three lawsuits against HudBay shouldn't be dismissed and should be allowed to proceed to trial because necessary standards were met.

Klippenstein said the ruling was a good reflection on the Canadian justice system, and gave hope to plaintiffs who'd felt victimized in Guatemala's "broken" system.

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