$1-Billion lawsuit against TSX, Copper Mesa, could last years

Copper Mesa Mining, two of its directors and the Toronto Stock Exchange spent six hours yesterday asking an Ontario court judge to dismiss a $1 billion human rights lawsuit filed against them by three Ecuadorians from the village, Junin, where the junior miner used to operate.

The judge will make a ruling within the next week or two but the plaintiffs’ lawyer, Murray Klippensteins, says he expects there to be an appeal no matter what the judge rules because the case is unique.

The Ecuadorian villagers have accused the company of hiring armed security forces that intimidated, threatened and assaulted villagers who were protesting the mining company’s presence. Protesters blocked the company from accessing the project and claimed that exploiting minerals would destroy their cloud forest community.

Klippensteins says the TSX has been named in the lawsuit because Copper Mesa (then known as Ascendant Copper) was dependent on the TSX listing to raise funds for the project, funds used to pay the security forces. The TSX was also warned before the listing that violence could be an issue. Only two directors were named in the lawsuit because they are the only ones that reside in Ontario.

Klippensteins says the courts will be looking at this case very closely because rules are being applied to new area – a mining company’s actions in another country are being tried here in Canada.

“The courts are having to look at this very carefully so I think there will be a few appeals and an actual trial is probably several years away,” Klippensteins says.

He says they are not interested in settling out of court.

The $1 billion is to both compensate the plaintiffs for the violence and threats but Klippensteins says that it’s the punitive damages that are most important to the case.

“They would like to win to show the legal rules can and should stop this kind of activity and that Canadian mining companies should change their behaviour in Ecuador and all over the world,” Klippensteins says. “Punitive damages because the attraction potentially large mineral deposit makes it very easy for companies to let principles slip and resort to violence against opposition to get at those minerals.”

The Ecuadorian government revoked Copper Mesa’s exploration permits in 2008 and was delisted from the TSX in February.

No one from the TSX or Copper Mesa was available for comment.

Klippensteins’ law firm is taking on the case pro bono.