by Daniela Pastrana: Pie de Pagina

Don Diego Celia Guerrero 04 1Foto: Celia Guerrero /Archivo Pie de PaginaThis is not fiction: an American company dedicated to finding treasures at the bottom of the sea has partnered with Altos Hornos de México to exploit an underwater mine in Baja California Sur and extract phosphorus. The Ministry of Environment denied the Environmental Impact Study due to the risk it generates for biodiversity, especially for the loggerhead turtle. Now, the mining company seeks compensation from the Mexican State for more than 3.5 billion dollars for its losses and has filed a formal complaint with an international trade court alleging that Secretariat of Environment and Natural Resources, SERMANAT, violated Chapter XI of the North American Free Trade Agreement.

In January, the Mexican government received notification of the intention to sue by Odyssey Marine Exploration, Inc. (Odyssey) for the cancellation of the Don Diego project, under Chapter XI, on investment, of the North American Free Trade Agreement (NAFTA).

And on April 5, according to documents in the Ministry of Economy, Odyssey presented “on its behalf and on behalf of the Mexican company Exploraciones Oceánica S. de R.L. from C.V. (ExO)” a “Notice of Arbitration (NOA) ”.  That is, the claim for which it demands compensation for 3,540 million dollars for loss of investment.

“Odyssey argues that ExO, a Mexican company that has rights over a phosphorus mining concession in Mexico, is its investment vehicle. Odyssey argues that it has conducted exploration expeditions that involved the work of technicians and a wide range of topographic, oceanographic and geological equipment to assess the area of investment. Odyssey alleges that SEMARNAT´s refusal to authorize the Environmental Impact Study has blocked the project, and the refusal was due to ulterior motives. Odyssey considers that the action by SEMARNAT has destroyed the value of its investment in Mexico and it is in violation of the following provisions of NAFTA: Article 1102. National Treatment; Article 1105. Minimum Standard of Treatment; and Article 1110. Expropriation and Compensation”, says the file of the Secretariat of Economy.

The lawsuit

The 26-page document, entered on April 5, alleges that with the resolution of SEMARNAT, Mexico violated Chapter XI of NAFTA, which protects investments.

This article is a legal resource that exists in all international trade treaties and has been applied more and more frequently by transnational extractivist companies to demand millionaire payments for the loss of investments from countries, as documented in the Extractivism Casino report, presented last Wednesday in Mexico City.

Until now, Mexico has had to pay transnational companies more than 242 million dollars for 9 resolutions that went against the country, and it has another 12 pending lawsuits, including that of another US mining company that claims 500 million dollars because municipal development and environment programs slowed the installation of a mine in Quintana Roo.

The amount of this claim, however, exceeds any compensation that Mexico has had to pay for the application of these sanctions.

"It is possible that the amount is so exorbitant in order to force the Mexican government to negotiate an agreement," says Jennifer Moore, co-author of the report.

In the lawsuit, Odyssey alleges not only that Mexico violated NAFTA by applying its environmental standards. It also argues that his project would be essential to guarantee the country's food sovereignty by reducing Mexico's dependence on fertilizer imports. And, that it would save millions in taxes.

The partnership with AHMSA

Odyssey Marine Exploration is an American company that explores for treasures in sunken ships. In 2O07 it extracted from the sea more than half a million gold and silver coins, Goya paintings and other objects considered underwater cultural heritage of a Spanish ship sunk in the Atlantic in 1804 (the find originated a 5-year litigation with the Spanish government that ended forcing the company to return the treasures).

Founded in 1994, the company is basically dedicated to developing technology to recover and commercialize wrecks of sunken ships, a business that allowed them to be listed in the New York Stock Exchange since 2003. But it is also a majority partner of three other companies that have operating licenses of seabed mineral deposits: Neptune Minerals, which has concessions in New Zealand and Japan; Chatham Rock Phosphate, in New Zealand, where a project similar to the Mexican one has been suspended since 2015. And Oceanica Resources, based in Panama.

Through the subsidiary Exploraciones Oceánica, S. de R.L. de C.V., it planned to install the world's first underwater mine to extract phosphorus in the Mexican coasts of Baja California Sur.

The mining project, called Don Diego, is in the Gulf of Ulloa, in the municipality of Comondú, where there has been a fishing ban since 2014 to protect loggerhead turtles.

The company would apply a mining technique that has never been tested, which caused strong opposition from environmental organizations and fishermen in the area. In September 2014 the project was rejected by Semarnat. Then Odyssey Marine Exploration partnered with Altos Hornos de México (AHMSA), the leading steelmaker in Mexico.

Its owner, Alonso Ancira Elizondo, was arrested on May 28 in Mallorca, Spain, “as a result of a complaint filed on March 5 before the FGR, by the Legal Representative of Pemex, on the occasion of a series of crimes that motivated serious property damage to the state company, ”according to the statement of the Attorney General of the Republic.

The arrest of Ancira Elizondo occurred less than 24 hours after the Finance Intelligence Unit (FIU) of the Treasury froze the bank accounts of AHMSA and former director of Pemex, Emilio Lozoya.

In December 2016, with the support of Round Earth Media, we published in an investigation into the Odyssey and AHMSA alliance to exploit the mine in Baja California.

The investigation carried out by Celia Guerrero revealed that, in March 2015, Exploraciones Oceánica received a capital injection of 15 million dollars from Minera del Norte (Minosa), a subsidiary of Altos Hornos de México (AHMSA), making the Mexican company senior partner. Afterwards, the company met with representatives of the incoming PAN government of Baja California Sur to lobby the Don Diego mining project and entered a new EIS, announcing the partnership with the steelmaker.

The Odyssey-AHMSA consortium was in charge of selling the Don Diego mine to local politicians and the federal government as indispensable for Mexico's food security, as it has insisted  in the law suit, since Mexico depends imports 83% of its fertilizers; and the phosphorus mine, an essential element for the manufacture of fertilizers, would benefit Mexican farmers.

That same month, Ocean Explorations criminally sued South Californian journalist, Carlos Ibarra, and members of the Puerto Chale Fishing Cooperative for dennouncing that company was digging exploration wells without the authorization of SEMARNAT. He was accused of "conspiring against the economic development of Mexico," and began what the organization Article 19 pointed out as one.

In December 2015, Odyssey sold a portion of the company for $21 million to Monaco Financial, a US firm dedicated to the commercialization of rare coins and precious metal products, and Mark Gordon, director of Odyssey, pointed out the seabed deposit in Mexico as a key asset of his company.

In April 2016, SERMANAT rejected the Environmental Impact study (EIS) of the Don Diego mining project mainly because of the risk it would pose to the loggerhead turtle.

But the story didn't end there. Now, the Odyssey-AHMSA alliance has charged again with a much greater ambition.


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