Canadian mining company authorised to continue case against El Salvador under Salvadoran law
On June 1, a tribunal at the International Centre for the Settlement of Investment Disputes (ICSID), housed at the World Bank, dismissed a claim by Pacific Rim, a Canadian mining company, that the government of El Salvador had violated the rules of the Central America Free Trade Agreement (DR-CAFTA).
But it said it would continue to hear the case based on Pacific Rim's claim that El Salvador had violated its own Investment Law, approved in 1999 under the administration of President Flores.
Read a press release on the CISPES website.
Since 2009, the Vancouver-based company has been pursuing over $100 million from the government of El Salvador for not having granted the company a permit to mine gold in the northern region of Cabañas.
Since 2005, the rural communities around the proposed mining sites have organized a vibrant resistance movement to prevent the contamination of their water and land by the two tons of cyanide that Pacific Rim mining proposed to use daily to extract gold at the El Dorado mine.
The tribunal dismissed Pacific Rim's claim that the government of El Salvador had violated the rules of the Central America Free Trade Agreement (DR-CAFTA), approved by the US Congress in 2005, on the grounds that the Canadian company, which moved a subsidiary from the Cayman Islands to Nevada in 2007, presumably to take advantage of the extraordinary rights afforded to corporations under CAFTA, did not have "substantial business activities" in the US.
Though the tribunal dismissed Pacific Rim's CAFTA attack, it refused to waive millions in tribunal costs and legal fees that El Salvador has paid in order to defend itself.
The tribunal also agreed to continue to hear the case based on Pacific Rim's claim that El Salvador had violated its own Investment Law, approved in 1999 under the administration of President Flores. Lisa Fuller, Program Director for CISPES explains, "This Investment Law is just like CAFTA and other so-called free trade agreements, in that countries like El Salvador must forfeit their own democratic processes in the name of attracting foreign investment, which is a hallmark of neoliberal economic policy."
In response to Friday's decision, the National Roundtable against Metallic Mining has called on President Funes to eliminate chapter 15 of El Salvador's Investment Law, which allows foreign corporations to bring suits like this one against the government at the ICSID, as well as to push forward a national ban on metallic mining.