Dispute over Gold Mining in El Salvador

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By Cameron Herrington of Seattle CISPES – Committee in Solidarity with the People of El Salvador

Contamination MuralOn June 1, in a hearing room at the World Bank in Washington, D.C., lawyers representing the government of El Salvador argued that it is the country’s sovereign right to protect the environment and human health by refusing to grant permits for metallic mining extraction. At the other end of the conference table, the Pacific Rim Mining Corporation’s lawyers argued that, on the contrary, the Salvadoran government’s refusal to grant gold mining permits is illegal, and that the company is therefore owed “hundreds of millions of dollars” by the Salvadoran state.

This quasi-court room scene is happening thanks to the U.S.-Central America Free Trade Agreement (CAFTA), which grants foreign investors extraordinary rights to sue governments that enact policies that have the effect of limiting profits – even if those policies are designed to protect the public interest. Because Pacific Rim Mining is based in Canada (a country that is not party to CAFTA), the company set up a subsidiary in Reno, Nevada, in 2007 in order to take advantage of CAFTA’s investment rules by filing the lawsuit against El Salvador.

Last week’s arbitration hearing, held under the auspices of the International Center for the Settlement of Investment Disputes (ICSID – a World Bank agency), was the first stage of Pacific Rim’s lawsuit against the Salvadoran government, which has halted Pacific Rim’s operations due to popular pressure mounted by a national coalition of environmentalists, community organizations and churches. The coalition’s concern? That cyanide used to extract gold could poison El Salvador’s largest river, the Río Lempa – the primary source of drinking water for millions in the country.

The coalition, known as the National Roundtable Against Metallic Mining – or, in Spanish, simply La Mesa – has over the last several years mounted a national campaign against gold and silver mining operations, citing the devastating environmental, social, and health effects mining has had in other Central American countries. La Mesa’s protests and national organizing efforts were strong enough to shut down Pacific Rim’s exploration activities in 2008 and turn public opinion against the mines. In response, the Salvadoran government has refused to grant mining permits, and Salvadoran President Mauricio Funes pledged in January 2010 that his administration would not grant permits for any metallic mining extraction projects.

Even though Pacific Rim’s permits have not been granted, and President Funes has promised that they won’t be, the company is able to maintain a presence in El Salvador because of its pending CAFTA lawsuit against the government. One result has been a surge of violence against anti-mining activists in the Cabañas region, where Pacific Rim’s mining claim is located. Since June 2009, three leaders of the anti-mining movement have been assassinated, along with numerous documented cases of death threats, kidnapping attempts, and assaults. Residents of Cabañas are quick to point out that political violence and this degree of social unrest did not exist in their communities before Pacific Rim arrived.

Anti-mining activists explain that the struggle over mining has already been won in El Salvador. Local communities, national public opinion, and the national government are all opposed to Pacific Rim’s plans. However, because of CAFTA, the fight has now moved to the international arena.

Because U.S. trade policy is at the root of Pacific Rim’s lawsuit against the Salvadoran government, fair trade advocates in the U.S. are pointing to this case as a clear example of why those policies must be overhauled. Groups like the Washington Fair Trade Coalition – and its 48 member organizations around the state – point to legislation currently before the United States Congress, known at the TRADE Act, that would force a review and renegotiation of our standing agreements, including CAFTA.

Among other changes, the TRADE Act would remove from U.S. free trade agreements the provisions that enable Pacific Rim Mining to sue El Salvador. “With these provisions eliminated, governments’ would be free to enact environmental laws and regulations without fear of lawsuits from foreign investors,” said Kristen Beifus, Director of the Washington Fair Trade Coalition.

Despite the dangerous precedent set by Pacific Rim’s lawsuit, Beifus points out that none of Washington state’s Congressional delegation – including Seattle’s Rep. Jim McDermott – is among the 145 co-sponsors of the TRADE Act.

“Congressman McDermott recognizes that our trade agreements have failed, and says that he supports trade reform,” Beifus said. “But as a senior member of the Washington state delegation, he has a responsibility to act on his professed ideals by co-sponsoring the TRADE Act, which is a concrete way forward for a new trade policy.”

For more on Rep. McDermott’s refusal to sponsor the bill, please see the recent article in Real Change News.

For more information, please visit Seattle CISPES: www.seattlecispes.org

One Response to “Dispute over Gold Mining in El Salvador”

  1. Gold Mining is one of the industries with the most riveting history – but I’ve never been personally touched by it like this. With such a high risk job, that encompasses everyone in the community, it’s no wonder that such a powerful sense of solidarity binds everyone together. What a beautiful feat of human nature.

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