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Resistance to Pacific Rim mining in El Salvador

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Cabanas mining site
Residents of San Isidro (in Cabañas, El Salvador) look out over a valley where the Canadian mining company Pacific Rim proposed to mine gold and silver. Photo by Jeff Deutsch/Oxfam America.

There’s a legal battle underway in Washington right now, between the government of El Salvador and a Canadian mining company called Pacific Rim. Citing the threat of environmental damage, in 2009 the government of El Salvador denied a mining permit to Pacific Rim, which was planning to mine for gold and silver. So the company set up an office in the United States and is suing the government of El Salvador under the rules of the Central America Free Trade Agreement (CAFTA).  This has led to two years of hearings at the International Center for Settlement of Investment Disputes in Washington, DC.

There’s a lot riding on this case for the government of El Salvador, beyond the $77 million Pacific Rim is demanding in the suit, which is about one percent of the country’s GDP. El Salvador is a small, densely populated country where there is already a lot of stress on the surface waters on which the citizens depend for drinking and for agriculture. Large-scale industrial mining could have irreversible effects on the country’s fragile and diminishing resources, and a number of courageous people who have dared to organize resistance to mining have been killed.

However when El Salvador signed CAFTA, it became subject to rules that might prevent it from denying mining companies the opportunity to operate on the basis of public safety or environmental protection. Companies can claim this is like having their businesses expropriated.

Mining debate in Salvador

Thanks to the efforts of a coalition of civil society groups called the Mesa Nacional Frente a la Mineria (National Roundtable on Metalic Mining), there is a national-level debate about mining in El Salvador.  The current President Mauricio Funes has stated publicly that he is against industrial mining for metal in the country, and his ministers of the environment and economics have made similar statements. Oxfam has helped the Mesa to work with the Center for International Environmental Law to file a friend-of-the court brief to the International Center for the Settlement of Investment Disputes.

Oxfam has been working with the members of the Mesa for five years, helping them with research on the viability of metallic mining as a path to development in Central America. “The Mesa has been really successful in making some important points about mining publicly, and they have built alliances in the government and the media,” says Juliana Turqui, Oxfam’s program coordinator in Central America. “They want the president to ban open-pit mining, which he promised to do in his election campaign. If the government wins this [Pacific Rim] case, it’s more likely he can do this.”

Juliana Turqui is Oxfam America's program coordinator for extractive industries in Central America. Photo by Anna Fawcus/Oxfam America.

Turqui says a decision about the Pacific Rim case should be coming soon. Next weeks she will be attending meetings with members of Congress in Washington along with Lourdes Palacios, a member of El Salvador’s congress and a fierce critic of large-scale metallic mining. “We want the International Center for Settlement of Investment Disputes to know a lot of people are looking at this case, and that it could set an important precedent.”

Oxfam is asking our supporters in the US to send a letter to Secretary of State Clinton asking her not to support Pacific Rim’s case. Turqui urges you to take this action: “The US is a powerful country and the decisions taken by Secretary Clinton and members of Congress have consequences in Latin America. This is an important case, and a huge amount of money for El Salvador.”

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  1. Chris Hufstader

    Hours after posting this last week we learned that the International Center for the Settlement of Investment Disputes issued a ruling that it would not hear Pacific Rim’s case against the government of El Salvador on the basis of the Central America Free Trade Agreement (CAFTA). Unfortunately, the Center also said it would allow Pacific Rim to proceed with a case against the government citing an alleged violation of investment laws in the country.

    It’s a case of good news/bad news, but the bad news is pretty bad: As my colleague Keith Slack puts it in a statement from Oxfam released today, “The Salvadoran government has recognized that not all foreign investment is good for the country. The ruling undermines the government’s ability to protect its citizens and the environment.”

    You can read the press release on Oxfam America’s web site:
    http://www.oxfamamerica.org/press/pressreleases/world-bank-allows-mining-company-lawsuit-against-el-salvador-to-move-forward

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