World Bank approves mining company suit against El Salvador

[Judi Lynn]

World Bank approves mining company suit against El Salvador
Submitted by WW4 Report on Mon, 08/09/2010 - 17:10. In a decision with implications for the national sovereignty of member states under US trade pacts, a World Bank tribunal has approved a Canadian mining company's controversial lawsuit against the government of El Salvador. In 2009, Pacific Rim Mining filed the suit under the rules of the US-Central America Free Trade Agreement (CAFTA), demanding hundreds of millions of dollars from the Salvadoran government, which rejected the Vancouver-based company's application for mining permits.

El Salvador's Ministry of the Environment and Natural Resources argues that Pacific Rim never completed the necessary process to obtain an exploitation permit, and local communities have demonstrated widespread opposition to the proposed El Dorado gold mine based on the environmental and public health risks of cyanide-leach mining.

On August 3, the International Center for the Settlement of Investment Disputes (ICSID) rejected the Salvadoran government's preliminary objections to the suit, which could have led to the dismissal of Pacific Rim's claim. Though this mechanism exists to avoid frivolous or coercive lawsuits, it is rarely, if ever, upheld in favor of a national government, suggesting a fundamental imbalance in favor of transnational corporations.

"It is outrageous that the government of El Salvador is under attack for protecting the health and safety of its people," said Alexis Stoumbelis, executive director of the Committee in Solidarity with the People of El Salvador (CISPES), which led protests in five US cities and outside Pacific Rim headquarters in Vancouver during the first round of ICSID hearings in May. "This is the ugly and fundamentally anti-democratic reality of free trade."

More:
http://www.ww4report.com/node/8928

[Judi Lynn]

1. CAFTA Attack on Green Policy: Did Obama Need More Reasons to Renegotiate Bush's NAFTA-Style Trade De

Lori Wallach
Posted: August 4, 2010 02:44 PM
CAFTA Attack on Green Policy: Did Obama Need More Reasons to Renegotiate Bush's NAFTA-Style Trade Deals?

Pacific Rim Mining Corp. just won the first stage in its attack under the Central America Free Trade Agreement (CAFTA) demanding hundreds of millions of dollars in compensation from the government of El Salvador over environmental and health policies. The corporation is using the CAFTA provisions that grant foreign investors expansive new rights to sue governments in foreign tribunals over regulations or government actions that conflict with the pacts' special rights for foreign investors and that could undermine their future expected profits.

Wait, weren't we told that those outrageous NAFTA-style foreign investor special privileges -- that promote offshoring and expose our public interest laws to attack in foreign tribunals -- had been fixed in CAFTA? So, we should not worry that the same provisions appear word-for-word in Bush Free Trade Agreements (FTAs) with Korea, Colombia and Panama? OK, we didn't buy it then, nor did congressional Democrats. Only 15 House Dems supported Bush's CAFTA, which Obama opposed as a Senator.

So, what's up with the Obama folks now? Last month, Obama said he wanted to start moving the three leftover Bush FTAs toward Congress and instructed trade officials to fix the Korea FTA so it could move early next year. But so far, "fix" only means improving access for U.S. auto and beef exports. The administration will decide its "ask" of Korea this month.

And now like a warning flare comes this ruling in a CAFTA investor attack on a country's environmental and health policies.

When it comes to the lunatic NAFTA-CAFTA investor rights, the U.S.-Korea FTA poses a special threat -- because both countries are major capital exporters. That means, in contrast to U.S. FTAs with developing countries, there are hundreds of Korean firms operating here that could use the FTA's investor rights to skirt our court system and laws and demand taxpayer compensation in foreign tribunals for U.S. laws that they do not like. And the hundreds of U.S. firms in Korea could do the same there. (Click on the link above to see the locations of these firms.) Moreover, this private enforcement system covers the Korea FTA's financial services provisions, meaning the recent U.S. and Korea reregulation initiatives would be newly exposed to attack by numerous banks and insurance and securities firms.

The fact that an attack like Pacific Rim's would even be possible highlights what is wrong with our current trade agreement model. The very existence of these extraordinary foreign investor rights -- the notion that foreign corporations could be allowed to sue the U.S. government in private international tribunals, bypassing domestic courts -- undermines federal and state efforts to protect public health, safety, and precious natural resources.

Consider the logic of Pacific Rim's case. The firm sought to establish a massive gold mine with cyanide ore processing in the basin of El Salvador's largest river, Rio Lempa. They got an initial exploration permit. El Salvador, the size of Massachusetts with a population density of 800 people per square mile, already faces severe environmental degradation and surface water contamination. Opposition to the project grew. The conservative Arena government agreed to do a national review of mining policy, but to date the laws remain the same. The firm's response was to not file the feasibility study, which is necessary to obtain an operating permit, and largely shut down operations. Now, the firm claims El Salvador should pay hundreds of millions of dollars because it failed to provide a stable investment environment.

More:
http://www.huffingtonpost.com/lori-wallach/tribunal-oks-mining-corps_b_670740.html

[Judi Lynn]

2. Pacific Rim v. El Salvador and the Perils of Free Trade in the Americas

Pacific Rim v. El Salvador and the Perils of Free Trade in the Americas
Sunday 01 August 2010

by: Krista Scheffey | Council on Hemispheric Affairs | News Analysis

In 2005, then-Senator Barack Obama published an opinion piece in the Chicago Tribune entitled “Why I oppose CAFTA.” In his article, released on the same date as the Senate vote on the Dominican Republic-Central American Free Trade Agreement (“DR-CAFTA”), Obama explained that he would not vote for the bill and voiced his opinion that DR-CAFTA “…does little to address enforcement of basic environmental standards in the Central American countries and the Dominican Republic.” Despite well-founded fears about the consequences of DR-CAFTA among its critics, President George W. Bush and his administration lobbied heavily for the passage of the bill, which was signed into law on August 2, 2005. El Salvador became the first of the Central American nations to implement DR-CAFTA after the treaty took effect in the country on March 1, 2006.

Like the North American Free Trade Agreement (“NAFTA”), the treaty that DR-CAFTA is based upon, DR-CAFTA’s Chapter 10 includes extensive investor rights provisions. These clauses, ostensibly designed to encourage foreign investment, in fact allow multinational corporations to avoid negotiations with individual governments and instead to settle investor disputes with an international tribunal. The first of such cases adjudicated under DR-CAFTA began when Pacific Rim Mining Corporation (“Pacific Rim”*), a Vancouver-based gold exploration company, filed a petition calling for arbitration proceedings against the government of El Salvador for allegedly failing to grant exploitation permits in accordance with the mining laws of El Salvador. The corporation hopes to receive a compensatory payment totaling at least US $77 million, the amount of money it claims to have lost while waiting for its mining permit to be issued. The case will have alarming implications in the event that the international tribunal rules in favor of Pacific Rim against the government of El Salvador: in addition to the staggering cost that would be imposed on the country, the case could set a precedent for other private companies looking to settle cases in international venues that they presume would be more sympathetic to their cause.

Weighing the Pros and Cons: Mining and the Environment

The subject of the Pacific Rim case is the El Dorado mine, located in the Cabañas department of El Salvador. As El Dorado is Pacific Rim’s “flagship” mining operation, the company has a huge stake in commencing the process of gold extraction. However, El Salvador’s Ministry of the Environment denied Pacific Rim an exploitation permit for the El Dorado mine after finding the Environmental Impact Assessment (“EIA”) unsatisfactory. An outside report, conducted by independent hydrologist Robert Moran, confirms El Salvador’s analysis. Moran writes that “ EIA would not be acceptable to regulatory agencies in most developed countries.” He notes that, while Pacific Rim claims to have conformed to World Bank Group’s mining safety guidelines, “these guidelines are, in many respects, much weaker than those that would be required to operate a mine in Canada or the U.S.A.”
Operations in Cabañas began in 1993, when Mirage Resources and Dayton Mining began exploration in the region; they found high-grade gold veins during the exploratory drilling phase. Pacific Rim had acquired the mine in 2002 through its merger with Dayton Mining. According to Cameron Herrington, an organizer with the Committee in Solidarity with the People of El Salvador (“CISPES”), the community in Cabañas became concerned with the possibly harmful environmental impact of the gold mine during the early phases of exploration. Although the company only had carried out the exploratory drilling activities at that stage, villagers had noticed that their wells were going dry. Access to water is a matter of grave concern in El Salvador, one of the countries with the least access to clean water in the hemisphere. According to Herrington:

When the people in Cabañas started to notice environmental changes taking place because of the gold exploration, they did their research: they looked to places like Guatemala and Honduras, where mining has taken a huge toll. They learned about communities that had been devastated by water contamination from mining.

More:
http://www.truth-out.org/pacific-rim-v-el-salvador-and-perils-free-trade-americas61916

[Peace Patriot]

3. U.S. "free trade for the rich" in a nutshell: cyanide the poor!

This is VERY RELATED to the U.S.-arranged, bloody rightwing coup in Honduras. One of the things that President Zelaya did, that put him on the U.S. shit list--a list of democratic governments that it is okay to overthrow--is that he joined ALBA, a Venezuela-organized trade group designed to give small countries like El Salvador and Nicaragua collective clout in dealing with the U.S. behemoth and its arrogant, planet-killing corporations, and to foster cooperative economics including barter trade. His other "crimes" were raising the minimum wage (an affront to U.S. multinationals running sweatshops in Honduras), lowering the price of bus rides for poor workers, providing a school lunch program for poor children and working with labor unions, human rights groups, environmental groups and others in the widespread movement for constitutional reform.

El Salvador and Honduras are in similar binds. Their resources and labor forces are egregiously exploited by U.S. corporations. Honduras additionally is occupied by the Pentagon--which is why that democracy fell first. (The plane carrying the kidnapped president of Honduras out of the country at gunpoint stopped at the U.S. military base, in Palmerola, Honduras, for refueling.) Both countries had rightwing governments that sold their countries' sovereignty to the U.S. for "free trade for the rich" (CAFTA). Both countries then managed to elect progressive presidents, who have tried to mitigate CAFTA's worst impacts (destruction of the environment, shit wages, vast poverty, privatization (looting) of public services, etc.). The rightwing coup government in Honduras withdrew Honduras from ALBA.

After the U.S.-arranged coup in Honduras--to deal a blow to the solid group of leftist governments that had been elected in Central America--in Nicaragua, Honduras, El Salvador and Guatemala--El Salvador's new leftist government decided NOT to join ALBA, a decision that was very likely aimed at preventing a similar U.S.-organized coup in El Salvador. But now they have no protection--no all Latin American trade group with collective strength for fending off outrages like this one.

The U.S. enforcers at the World Bank know very well what their job is--to punish them severely for trying to enforce labor and environmental regulations, to isolate them, to break them, so that their resources and labor have no protection from anybody. And if that doesn't work--if legal punishment does not break them--the U.S. is meanwhile funneling money, through USAID and other U.S. taxpayer funded entities, to rightwing forces in these countries who will overthrow their democracies, on cue. Then Hillary Clinton will come in and hold an "election" under martial law, also funded by our tax dollars through entities like John McCain's International Republican Institute--as they did in Honduras. (McCain has telecommunications and other interests in Honduras. Zelaya opposed privatization of Honduras' telecommunications.) Death squads will start picking off trade unionists, human rights advocates, community organizers and others--as is happening in Honduras--and the horrors of the Reagan era will start all over again.

Cyanide. U.S. policy is POISON. That's the long and the short of it. And Venezuela had the right idea--the ONLY way that smaller countries can protect their democracies, their sovereignty and their peoples' right to govern themselves is by collective strength in regional organizations that do not including the U.S. and Canada.

ALBA trade partners include Venezuela, Bolivia, Ecuador, Nicaragua, Cuba, Antigua and Barbuda, Dominica and St. Vincent and the Grenadines--8 countries. It was to have included Honduras and El Salvador as well--10 countries and counting--but for gross U.S. interference. In one blow, the U.S. severed Honduras from ALBA and scared El Salvador off. And this is the result. Poison.