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Salvadoran Group Fighting Investor-state Cases by Global Mining Firms Honored in Washington

Manuel Pérez Rocha

Institute for Policy Studies

20091015_IPS_Awards_270Five Salvadoran social activists traveled to Washington, DC in October to receive the Institute for Policy Studies’ prestigious international Letelier-Moffitt Human Rights award, in an emotional celebration.  At the same event, Domestic Workers United in New York, was recognized and awarded at a national level.

These Salvadorans are members of the renowned  National Roundtable on Mining in El Salvador, which includes diverse social organizations, environmental groups, and religious organizations, and focuses on local development and research.  Known as “The National Roundtable” this organization convinced the government of El Salvador to stop gold mining in their northern communities.

These activists made great achievements against all odds, and amidst a climate of repression that sparked violence and resulted in the assassination of one of the group’s principal organizers, Marcelo Rivera.  The National Roundtable works successfully through informational activities, awareness building and mobilizations, destroying the myths that foreign investment in mining can bring progress for rural communities and that such a thing as green mining exists.  According to the National Roundtable “the threat of mining was approached as a national problem, not focused only on the communities surrounding the proposed mining projects, but as a problem of survival on a national scale, and on the survival of humanity.” Their campaign demonstrated the infeasibility of metal mining in El Salvador due to “the country’s small size geographically, high population density, severe environmental degradation, and proximity to water resources, among other factors.”

By stopping the Canadian company, Pacific Rim and the U.S. company, Commerce Group, the National Roundtable has halted this exploitation of their lands and the environmental degradation in El Salvador, which is, according to the National Roundtable, “the second worst environmental degradation in the Hemisphere, only after Haiti.”  According to them, “mining aggravates this environmental situation due to the pollution-of water, air and soil, caused by the use of toxic chemicals such as cyanide, release of heavy metals (arsenic, lead, cadmium, etc.) and generations of acid drainage.”

Vidalina Morales of the Association for Local Economic Development (ADES, and part of the National Roundtable) said in her passionate acceptance speech that it is now a case of  “the perpetrator who sues the victim.”  Indeed, although the National Roundtable organizations and environmental experts (including two United States experts) have managed to demonstrate how the mining company, Pacific Rim, has breached environmental requirements, violated laws, caused environmental damage and economic losses to communities and caused social conflicts and corruption, Pacific Rim is now suing the victim, El Salvador, for $77 million for denying a license for the El Dorado mine.

This demand by Pacific Rim is made under the investment rules of the Central America Free Trade Agreement (DR-CAFTA- a trade agreement between the United States, Central America and the Dominican Republic) under which a foreign investor can sue a national government for having prevented a future gain. These types of cases are resolved in supranational courts, such as the International Centre for the Settlement of Investment Disputes (ICSID- a part of the World Bank), which is the court deciding this case against El Salvador.

Another company is closely following the steps taken by Pacific Rim to sue for million-dollar investments that they never even made. The U.S. mining company, Commerce Group, is suing the Salvadoran government for $100 million and demanding the reinstatement of their operating license which was suspended due to their polluting of a Salvadoran river.

In short, these companies say to El Salvador, ‘Let me exploit your lands and take your gold out of them, it doesn’t matter how devastating it is for your people and the environment- OR-  I’ll sue you, and you will have to pay me money I hoped to gain.  This is why we have the brand new DR-CAFTA and ICSID tribunals.’  The terrible and immoral factor is that these monies, rather than being used, in an impoverished country like El Salvador,  to address needs like health or nutrition, (which are also affected by the same DR-CAFTA) must then be used to pay these blackmailers. As the National Roundtable says,

“The demands of Pacific Rim and Commerce Group set a dangerous precedent for El Salvador and for any State which does not meet the interests of transnational corporations. It is therefore necessary to discuss the reversal of -or at least reform of-CAFTA. The most harmful aspects should be examined, especially the agreement’s ambiguous definition of investment and the ominous beginning of indirect expropriation, defined as such for any governmental action or omission that harms the profitability-even the prospect of profit- for companies. These demands also should encourage a review of all bilateral investment treaties and a reflection on the possibility of waiving the jurisdiction of agencies such as the ICSID, as was done recently in Bolivia and Ecuador. The objective is to close the doors on any claims of companies and investors against the state.”

In addition to receiving the prize mentioned, the members of The National Roundtable also visited other cities in the United States and Canada (including Vancouver, where the headquarters of Pacific Rim are located).  Their campaign has brought together a number of organizations willing to accompany them in their current and future struggle- their struggle to halt the excessive privileges granted to these companies.   They call for the end of the climate of violence and social unrest unleashed, the cancellation of these unjust and inhumane demands against El Salvador, and for the national congress of El Salvador to pass a law prohibiting the exploitation of gold and other metals in their country.

For those who were privileged to receive and accompany these Salvadoran colleagues,  we receive from them an example of strength and courage that serves to strengthen organizations throughout the hemisphere and globally who are fighting against the insane mining practices of our planet’s resources- whose sole purpose is usury. Gold is perhaps the best historical symbol of death and destruction of entire peoples for the sake of enrichment. So the National Roundtable’s struggle is the struggle of all defenders of human rights and those who are concerned about the future of humanity and the planet. For this very reason, it is necessary to revoke the free trade agreements, which like the DR-CAFTA, give rise to the unleashing by transnational corporations of a series of outrages against human dignity and life itself. The representatives of the National Roundtable have come to Washington to tell us “Yes You Can” and have left us eager to continue fighting.

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