News

Law suit against El Salvador one of the longest running cases in the history of ICSID

By:  P. Cabezas

Anti-mining activists in el Salvador and their allies in the US and Australia demanded on April 28th that de International Center for the Settlement of Investment Disputes, ICSID, release immediately a a favorable resolution in the impending case of Pacific Rim Mining vs El Salvador.

13087404 507766629412201 608600027044045582 nA statement delivered simultaneously to offices in San Salvador, Washington and Melbourne asked the World Bank to stop enabling a tribunal utilized by multinational corporations to undermine human rights. “Fifty years of ICSID and billions of dollars in corporate awards is enough. It’s time for the World Bank to evict ICSID and take a stand for environmental, social and economic justice” read the statement.

Pacific Rim launched a lawsuit against the government of El Salvador for $77 million dollars after President Mauricio Funes announced an administrative freeze on mining related proceses in 2009. The company had failed to meet regulatory requirements to obtain a permit for its El Dorado project, yet it utilized little known investor protection provisions within the Central America Free Trade Agreement, and later the Salvadorean investment law, to argue that it was entitled to compensation because the government’s decision not to extend the permit was political. 

A panel of arbitrators agreed, in June 2012, with El Salvador's argument that Pacific Rim had set up a shell company in the United Stated states with the specific pupose of launching a lawsuit and ruled that the company was not entitled to pursue a case under the Central American Free Trade Agreement. The panel, however, ruled that the company could pursue the lawsuit under the now amended Article 15 of the Investment Law of El Salvador which, at the time, allowed any foreign corporations to bypass the local judicial system and utilize the ICSID as a dispute resolution mechanism.          

The company ran into financial troubles in 2013 when it failed to raise further investment to sustain a high profile law suit.  In October 2013 it sold its assets, including the law suit against El Salvador, for only US 10.2 million dollars to Australian/Canadian Company OceanaGold.  OceanaGold continued to bankroll Pacific Rim’s lawsuit against El Salvador without assuming any liabilities; it also raised the stakes by increasing the lawsuit to 315 million US.

Members of the National Roundtable Against Metallic Mining in El Salvador, La Mesa, called this a “shameless act of legalized extortion” carried out by company that has never had any ties to El Salvador and never invested one cent in the country in the first place.  “How is it possible that such a company can make a 10 million dollars investment and immediately demand 315 million dollars from our government?” asked environmental leader   Vidalina Morales.   

The final arguments on the merits stage  of the case were presented in September 2014, but 18 months after the hearing, the tribunal has yet to issue a resolution.  This delay has already made the case of OcenaGold-PacRim vs El Salvador one of the longest running cases in the ICSID,  an article published in the Global Arbitration Review argues that the five longest running cases in the history of ICSID have waited between 6.3 years to 10.5 years. Considering that Pacific Rim submitted its request for arbitration in April, 2009, it safe to say that this case has already taken the number 5 spot on the list, with 7 years in waiting.  Also, the case has already surpassed the average number of days, 472, the panel takes to issue a resolution after the final arguments.  

Not only has the case become one the longest running cases at ICSID, but it has cost the Salvadorean public purse over 12.5 million dollars in legal expenses.

Even if the law suit is declared with no merits and the tribunal rules in favor of El Salvador, we have already incurred a loss says Bernardo Belloso, president of CRIPDES and a member of La Mesa.   For a small country with limited financial resources and critical social and environmental problems, 12.5 million dollars could be better spent towards social programs that could benefit the population.  “12 million dollars, for instance, is the yearly cost of running Ciudad Mujer, an innovative network of government run centers that promote gender equality through reproductive sexual health, holistic approaches to gender violence and economic empowerment opportunities for over 150,000 women who benefit from its programs every year.” He stated.   

Law suit against El Salvador one of the longest running cases in the history of ICSID

By:  P. Cabezas

Anti-mining activists in el Salvador and their allies in the US and Australia demanded on April 28th that de International Center for the Settlement of Investment Disputes, ICSID, release immediately a a favorable resolution in the impending case of Pacific Rim Mining vs El Salvador.

13087404 507766629412201 608600027044045582 nA statement delivered simultaneously to offices in San Salvador, Washington and Melbourne asked the World Bank to stop enabling a tribunal utilized by multinational corporations to undermine human rights. “Fifty years of ICSID and billions of dollars in corporate awards is enough. It’s time for the World Bank to evict ICSID and take a stand for environmental, social and economic justice” read the statement.

Pacific Rim launched a lawsuit against the government of El Salvador for $77 million dollars after President Mauricio Funes announced an administrative freeze on mining related proceses in 2009. The company had failed to meet regulatory requirements to obtain a permit for its El Dorado project, yet it utilized little known investor protection provisions within the Central America Free Trade Agreement, and later the Salvadorean investment law, to argue that it was entitled to compensation because the government’s decision not to extend the permit was political. 

A panel of arbitrators agreed, in June 2012, with El Salvador's argument that Pacific Rim had set up a shell company in the United Stated states with the specific pupose of launching a lawsuit and ruled that the company was not entitled to pursue a case under the Central American Free Trade Agreement. The panel, however, ruled that the company could pursue the lawsuit under the now amended Article 15 of the Investment Law of El Salvador which, at the time, allowed any foreign corporations to bypass the local judicial system and utilize the ICSID as a dispute resolution mechanism.          

The company ran into financial troubles in 2013 when it failed to raise further investment to sustain a high profile law suit.  In October 2013 it sold its assets, including the law suit against El Salvador, for only US 10.2 million dollars to Australian/Canadian Company OceanaGold.  OceanaGold continued to bankroll Pacific Rim’s lawsuit against El Salvador without assuming any liabilities; it also raised the stakes by increasing the lawsuit to 315 million US.

Members of the National Roundtable Against Metallic Mining in El Salvador, La Mesa, called this a “shameless act of legalized extortion” carried out by company that has never had any ties to El Salvador and never invested one cent in the country in the first place.  “How is it possible that such a company can make a 10 million dollars investment and immediately demand 315 million dollars from our government?” asked environmental leader   Vidalina Morales.   

The final arguments on the merits stage  of the case were presented in September 2014, but 18 months after the hearing, the tribunal has yet to issue a resolution.  This delay has already made the case of OcenaGold-PacRim vs El Salvador one of the longest running cases in the ICSID,  an article published in the Global Arbitration Review argues that the five longest running cases in the history of ICSID have waited between 6.3 years to 10.5 years. Considering that Pacific Rim submitted its request for arbitration in April, 2009, it safe to say that this case has already taken the number 5 spot on the list, with 7 years in waiting.  Also, the case has already surpassed the average number of days, 472, the panel takes to issue a resolution after the final arguments.  

Not only has the case become one the longest running cases at ICSID, but it has cost the Salvadorean public purse over 12.5 million dollars in legal expenses.

Even if the law suit is declared with no merits and the tribunal rules in favor of El Salvador, we have already incurred a loss says Bernardo Belloso, president of CRIPDES and a member of La Mesa.   For a small country with limited financial resources and critical social and environmental problems, 12.5 million dollars could be better spent towards social programs that could benefit the population.  “12 million dollars, for instance, is the yearly cost of running Ciudad Mujer, an innovative network of government run centers that promote gender equality through reproductive sexual health, holistic approaches to gender violence and economic empowerment opportunities for over 150,000 women who benefit from its programs every year.” He stated.   

NEW BOOK: Rethinking Bilateral Trade Agreements

Republished from Both ENDS 

See chapter on "ISDS, Extractive Industries and the Pacific Rim vs El Salvador case" on page 231, written by Sarah Anderson and Manuel Perez Rocha from the Institute for Policy Studies.    

3Voorkant Rethinking Bilateral Investment Treaties In 1959, Germany and Pakistan signed the first Bilateral Investment Treaty (BIT) in the world. Without knowing, they marked a new era as many countries have followed their example since then. Currently, the international legal system that governs international investment flows consists of about 3000 BITs and othert Bilateral Investment Treaty (BIT. While originally these treaties were thought to be beneficial for the investor and the host state in terms of economic growth, increased foreign investment and development, many host states have suffered negative consequences instead of benefiting from them. 

A new book, published by Madhyam, Both ENDS and SOMO, aims to encourage the collective thinking about BITS and other investment treaties, and to engage all stakeholders – governments, inter-governmental organisations, the private sector, civil society, think-tanks and academia - in this process.

Huge claims

“Almost all investment treaties include a so-called ‘Investor to State Dispute Settlement mechanism’ (ISDS), allowing investors to sue their host state when changes to regulations threaten to reduce profits. Many countries have already faced unexpected claims against them, because they wanted to implement new laws or rules to ensure financial stability, or to protect the environment or the health of their people,” says Kavaljit Singh, director of Madhyam, New Delhi. “In recent years, a global backlash against BITs has gained momentum and the call to roll back the BIT regime and protect national sovereignty is getting stronger. Several developing countries have already terminated their BITs or are in the process of doing so. And in Europe opposition against the ISDS-system is growing fast amongst citizens as well as politicians", says Burghard Ilge from Both ENDS

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PRESS RELEASE: Mining, Corporate Social Responsibility, and Conflict: OceanaGold and the El Dorado Foundation in El Salvador

OceanaGold CSR

Download the Report here

(Ottawa/Washington/Melbourne)  A new study finds that OceanaGold’s attempt to rebrand its proposed gold mine in El Salvador through the use of a company-sponsored foundation at the local level is deceitful, disrespectful and dangerous.

Mining, Corporate Social Responsiblity, and Conflict: OceanaGold and the El Dorado Foundation in El Salvador, published by the Institute for Policy Studies and MiningWatch Canada, will be presented at OceanaGold’s office in Melbourne on Thursday, the 36th anniversary of the murder of Salvadoran Archbishop Óscar Romero.

“Designed to whitewash the company’s image and undermine opposition to a proposed gold mine in Cabañas, the activities of the El Dorado Foundation contradict the country’s decision not to permit metal mining and risk reawakening a conflict that has already cost several people their lives,” remarks Professor Stuart Kirsch, one of the authors and an anthropologist at the University of Michigan with two decades of experience studying mining conflicts.

Canadian-Australian mining company OceanaGold is suing El Salvador for US$250 million at a World Bank tribunal when the company failed to obtain a mining permit for which it never met regulatory requirements. Three successive Salvadoran presidents have committed not to issue new mining permits, while a 2015 opinion poll found that opposition to metal mining is nearly 79.5% nationwide and 83.9% in municipalities affected by the proposed project.

Between 2009 and 2011, four local environmental activists were murdered in Cabañas. Since then, several local organizations have also received threats These crimes have never been fully investigated.

“At the same time that the El Dorado Foundation’s activities could raise the stakes and stir up tensions again locally, they gloss over the negative impacts from mining that Salvadorans worry could damage vital water supplies. The Foundation’s propaganda paints a positive picture of OceanaGold’s Didipio mine in the Philippines where two activists have also been killed and there have been serious complaints over environmental and social harms,” remarks Jen Moore, Latin America Program Coordinator for MiningWatch Canada and co-author of the report.   

“OceanaGold claims it is committed to improving conditions in local communities, but this is absurd when the company is suing El Salvador for hundreds of millions of dollars in a process designed to coerce the government into giving it a mine permit. If it would only withdraw its suit, millions of dollars in legal costs would be freed up that could be put to productive use in Cabañas and El Salvador,” states Manuel Pérez Rocha, a fellow with the Institute for Policy Studies.

OceanaGold is suing El Salvador on the basis of provisions commonly found in international investment agreements, such as the proposed Trans Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), the Comprehensive Economic and Trade Agreement (CETA) and others. International arbitration cases have a chilling effect on the efforts of governments to enact measures to protect the environment and public health, including proposals in El Salvador to legally ban metal mining.

The report calls for the closure of the Foundation given broad opposition to mining in Cabañas and El Salvador, the manipulative practices of the Foundation is operating, as well as the potential to reignite violent conflict in the area.

The report was presented in public forums in Cabañas and San Salvador in early March. Father Bob Maguire will present the report at OceanaGold’s head office, 357 Collins Street in Melbourne, Australia, at 11:30am AEDT on Thursday March 24th.

  1. executive summary of the report, as well as high and lowresolution versions of the report can be downloaded here.

Contacts

  • Canada: Jen Moore, MiningWatch Canada, (613) 569-3439, jen(at)miningwatch.ca
  • US: Manuel Pérez Rocha, Institute for Policy Studies, (240) 838-6623, manuel(at)ips-dc.org
  • US: Stuart Kirsch, (734) 764-2292, skirsch(at)umich.edu
  • Australia: Sean Cleary, +61 403 434 512, sendwine(at)gmail.com

El Salvador: ‘We will never lose our faith’

Vidalina Morales, president, Association for Economic and Social Development of El Salvador (ADES) interviewed for The Guardian in response to the murder of Honduran activist Berta Caceres.  

I felt indignation and sadness at Berta’s murder. I cried a lot and felt pain. 

And it is not a unique case. Through this decade many others have been murdered in Honduras for defending their lands. Here in El Salvador we have had four environmentalists murdered including Dora Sorto who was eight months pregnant. Without a doubt, the struggle to defend our territories and to protect the environment is alive throughout the continent.

With ADES, we have been fighting to stop the introduction of mining projects in Cabañas, and El Salvador, for the last ten years. We are also working with farming communities to change practices in the use of pesticides and foster farming practices that are a sustainable alternative to mining. And, we work on community education campaigns to inform the population about the negative impacts of mining and extractive industries.

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Research reveals that right wing parties collaborate with mining companies in the department of Cabanas.

By Wilber Ruano: RNES

An investigation by MiningWatch Canada reports that the activities of the El Dorado Foundation, originally established by Pacific Rim in El Salvador in 2005, and now run by OCEANAGOLD, violate the rights of the inhabitants of the department of Cabañas.

Researcher Jennifer Moore stressed that mining companies create foundations to disguise their intentions, but basically are just looking to extract riches at the expense of human rights violations of the inhabitants of the area.

Read more ...

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