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Entries tagged "gold mining"

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A Road Trip to Save El Salvador's Water

July 3, 2013 ·

This piece originally posted in YES! Magazine. John Cavanagh contributed to YES! as part of a new "idea sharing partnership" between YES! and the Institute for Policy Studies.

Delegation protest at the site of Pacific Rim mine in Cabanas, El Salvador. Photo by Ron Carver.Robin is standing in front of a church in Guatemala with some of the other members of the first international delegation on “gold mining and the defense of water in El Salvador.” We are 44 people from 12 countries who have come to support El Salvador's right to stop environmentally destructive gold mining. We have come as allies of a coalition called the National Roundtable Against Metallic Mining (“La Mesa”), and we have traveled just across the border to Guatemala because the source of the Lempa River that supplies most of El Salvador's fresh water is here in the Guatemalan hills.

Goldcorp, one of Canada's largest gold mining firms, is building a mine here. The environmental havoc unleashed by this mine will affect not only Guatemalans, but also Salvadorans who depend on the Lempa’s waters as it meanders through El Salvador on its way to the Pacific Ocean.

Read the full article in YES! Magazine.



An Appeal to Canada to Stand with El Salvador, the First Nation to Halt Gold Mining

November 14, 2012 ·

I paid a visit this week to the Canadian Embassy with colleagues from the Institute for Policy Studies and other environmental and public policy organizations to deliver a letter to the Canadian Ambassador to the United States. We are demanding that his government tell Pacific Rim — the Vancouver-based mining company — to stop bullying the people of El Salvador.

John Cavanagh, IPS Director, speaks with Canadian Ambassador to discuss how Canadian company Pacific Rim is bullying El Salvador.

Our letter was co-signed by Greenpeace, Sierra Club, Public Citizen, Friends of the Earth, Earthworks, the Center for International Environmental Law, and others. We wrote:

“Given the severe environment and human rights implications associated with Pacific Rim’s investment in El Salvador and the gold mine and cyanide leach-water processing plant it is proposing, we urge the Canadian government to alert Pacific Rim that its investor-state claim against the Salvadoran government for enforcing its own environmental laws and striving to protect its water and communities tarnishes the image of the Canadian mining industry.”

Salvadoran community leaders tell us that, since 2009 when they came to Washington DC to receive the Letelier-Moffitt human rights award from IPS, Pacific Rim has been trying to transform itself from victimizer to victim. This behavior is reprehensible. Some have lost their lives due to anti-mining activities, such as Marcelo Rivera, the brother of one of those who received the awards, who was assassinated for speaking out about the perils of gold mining.

This is the effect of free trade agreements.

Despite the prospect of major environmental damage, Pacific Rim says it has the “right,” under the investor–state regime allowed by investment rules in free trade agreements, to reap the profits that would have been brought by gold mining. In pursuit of these so-called lost profits, Pacific Rim is demanding up to hundreds of millions of dollars in compensation at the International Centre for Settlement of International Disputes (ICSID), an unaccountable World Bank tribunal that operates behind closed doors.

The Sierra Club “opposes trade and investment agreements that allow foreign corporations to attack environmental and public health protections in secret trade tribunals,” says  Ilana Solomon, trade policy expert at the Sierra Club. “This lawsuit by Pacific Rim, which threatens the health and safety of communities in El Salvador, is a case in point for why we oppose these secret tribunals." 

Using large roll-out maps of El Salvador watersheds that he brought along, IPS director John Cavanagh explained to the First Secretary of the Canadian Embassy that, though there is always danger from the mining and processing necessary to extract gold, Pacific Rim’s activity in El Salvador is particularly threatening given that El Salvador is the second most water-starved country in our hemisphere. A full 98 percent of El Salvador’s surface water is contaminated, some of it from mining activity halted decades ago. Yet Pacific Rim stands to exacerbate El Salvador’s water problems, threatening the river that supplies water to over half the population. 

There is a broad consensus in the department of Cabañas and throughout the country that opening a mine in the Lempa River watershed presents a dangerous risk that El Salvador cannot afford. Polling shows that the people of El Salvador oppose gold mining and the government supports this mandate.

Pacific Rim claims that those who oppose gold mining are “certain,” “rogue,” and “anti-developmental” organizations. But hundreds of environmental organizations in the United States, Canada and globally stand firm to defend the right of the people of El Salvador  — the first nation to halt gold mining — to defend their environment and to implement public policies to this end. Yesterday we asked the embassy official to notify his government that we expect an escalation in worldwide protests demanding that Pacific Rim drop its suit at the World Bank’s ICSID, and leave El Salvador.

In addition to environmental concerns, Pacific Rim’s project has caused divisions and severe human costs. As our letter states:

“We are deeply troubled by the human rights abuses associated with the Pacific Rim mine. Already, four environmental activists have been assassinated and many more have been threatened, including journalists who operate a local radio station.”

No company should have the right to threaten a country like this.

Mining Firm Doubles Up On Law Firms in Quest for Pot of Gold

June 7, 2012 ·

A Canadian mining company has cleared a major legal hurdle in their quest to exploit gold in El Salvador. In a celebratory press release, the firm, Pacific Rim, quoted lawyers from two Washington, DC law firms that are representing it in the case.

A mural in El Salvador shows Pacific Rim as a river-killing monster.I guess having one legal powerhouse behind you just isn't enough when a major pot of gold is at stake. And so far, the investment appears to be paying off.

Pacific Rim is suing the government of El Salvador, demanding more than $77 million in compensation over the government's denial of a permit for a gold mining project. The government acted in response to strong public concerns that the project could contaminate a river that is the drinking water source for more than half the country.

The World Bank tribunal hearing the case, in a classic cowardly maneuver, put the word out late Friday that they planned to advance the case past the jurisdictional phase and start hearing arguments about the merits.

The Pacific Rim release quotes one "extremely pleased" lawyer from Weil, Gotshal & Manges and another from Crowell & Moring who called the ruling a "great development." The continuation of the case makes for more billable hours. According to the Wall Street Journal, lawyers at Weil, Gotshal & Manges make as much as $1,045 per hour. GDP per capita in El Salvador: $3,426.

What's remarkable is that Pacific Rim was able to hire these two law firms despite having no current income stream. They are essentially a corporate shell whose main asset is a lawsuit on which investors are willing to gamble. So they might lose a few million. But if the legal blackmail works and El Salvador allows the mining project to go ahead, the skyrocketing price of gold will produce a handsome return. Pacific Rim's release notes that "the Company has received encouraging feedback from potential sources of non-equity financing" to pay for the final phase of the lawsuit.

The response to the tribunal ruling in El Salvador is not so happy. A diverse coalition of faith, environmental, and community groups fought against Pacific Rim's mining plans because they don't want their children drinking the poisoned water that often gets left behind when foreign corporations come hunting for gold. Polls show the majority of the country is opposed to the project and two successive Presidents from different parties have been on their side.

So how did this domestic policy issue wind up before an international tribunal? Pacific Rim based its legal claim on alleged violations of two laws -- the U.S. trade agreement with Central America and a national Salvadoran investment law adopted in 1999. Both of these allow private foreign investors to bypass domestic courts and bring claims for compensation to international tribunals, such as the International Center for Settlement of Investment Disputes, housed at the World Bank.

The tribunal decided that the company did not have the right to sue under the trade agreement because they are a Canadian company and Canada is not a part of that treaty. But they will hear arguments about whether El Salvador breached its obligations under its domestic laws. It's not uncommon for cases like this to drag on for years, costing both sides millions of dollars in legal fees.

At a rally in front of Pacific Rim's Vancouver headquarters on June 2, Salvadoran activist Vidalina Morales asked for international solidarity in demanding that Pacific Rim drop the suit. She said the broad-based coalition that has come together around the issue, the National Roundtable on Metallic Mining, is now even more determined to obtain their ultimate goal, which is a ban on all mining in the country in the environmentally fragile country.

Unfortunately, the international regime for handling investment disputes doesn't pay much heed to the will of the people.

Mining for Profits

December 18, 2011 ·

The small country of El Salvador has dared to stand up against powerful international gold mining companies. And now they're dealing with the blowback.

One of the companies salivating over El Salvador's gold is suing the government for their failure to bow down and grant a permit for a proposed mining project. There is strong local resistance to the project because of concerns it could poison a river that is the source of water for more than half the national population.

The company, Pacific Rim, is demanding in excess of $77 million in compensation, alleging violations of "investor protections" under the U.S. trade agreement with Central America.

If Pacific Rim wins, the government will face a stark choice: fork over a huge chunk of taxpayer dollars to a foreign corporation or put its people's health at risk.

But those fighting the case in El Salvador have an increasing number of influential allies in Washington, where the case is being heard at an international arbitration tribunal housed in the World Bank. On December 15, labor, environmental, faith, and other groups turned out for a rally to demand that the case be dismissed. They delivered a letter to World Bank and tribunal officials signed by more than 240 international organizations, including 14 U.S. labor unions.

Particularly notable among them was the United Mineworkers. Although their members' livelihoods depend on the mining industry, they expressed solidarity for those in El Salvador who are resisting this mining project because of the possible repercussions for public health and democracy.

El Salvador is still struggling to transition to representative democracy after years of civil war and there are lingering concerns about political violence. Tim Beaty, Director of Global Strategies for the International Brotherhood of Teamsters, spoke about his union's long history of solidarity with unions in El Salvador and said they are still seeking justice in the case of a Teamster organizer, Gilberto Soto, who was killed while he was working to make connections between U.S. and Salvadoran port workers in 2004. In the course of the dispute over Pacific Rim's proposed mining project, four Salvadoran anti-mining activists have been murdered.

The Pacific Rim case is just one example of a growing number of "investor-state" lawsuits over natural resources. An Institute for Policy Studies report, Mining for Profits in International Tribunals, finds that 43 of the 137 pending cases before the World Bank tribunal are related to oil, mining, or gas. By contrast, one year ago there were only 32 such cases and 10 years ago there were only 3.

Not surprisingly, this increase has coincided with an increase in commodity prices. The price of gold, for example, has quadrupled, from $282 per ounce in January 2000 to $1,900 in September 2011. Corporations are using expensive lawsuits filed under trade rules as one more weapon to get their hands on these valuable resources.

new video produced by the Democracy Center in Bolivia tells the broader story of how corporations are using these new powers to push back against all manner of government actions, including anti-smoking regulations in Uruguay, and the growing resistance in many developing countries. Even if Pacific Rim loses its case against El Salvador, the bigger struggle will continue to rewrite our trade rules so that governments don't have to face such outrageous cases in the first place. 

Why the 99 Percent are Protesting at the World Bank Today

December 15, 2011 ·

99 Percent Protesting at the Word BankToday I will join leaders from the labor, environmental, faith, and human rights communities to protest in front of the World Bank.

Why?

We'll be there to stand up for the democratic rights of people everywhere in the face of ever-expanding corporate rule.

There's a set of people from the 1 percent who don't think we should be there. Twenty-one years ago, those people got together just two blocks north of the World Bank, in the K Street corporate lobbyist corridor, and crafted a set of corporate rights that they then inserted in the North American Free Trade Agreement (NAFTA).

These so-called "investor protections," now in dozens of U.S. trade and investment treaties, are some of the most extreme examples of excessive corporate powers you could find. They grant corporations the right to sue governments in international tribunals over actions that reduce the value of their investment. This can even include environmental, health, and other measures to protect the public developed through a democratic process.

These rules empowered an obscure tribunal in the World Bank to rule on these "investor-state" cases. Three people who no one elected can decide the fate of millions.

One of these tribunals will soon decide the fate of El Salvador. A gold mining company, Pacific Rim, is suing for compensation because that government has not approved a permit for a gold mining project. The majority of Salvadorans oppose this project because of legitimate concerns that it could poison a river that's the country's biggest source of drinking water. Pacific Rim is demanding in excess of $77 million.

The story gets even more outrageous. Pacific Rim is suing under the U.S. trade agreement with Central America and the Dominican Republic, called DR-CAFTA. But since Pacific Rim is based in Canada, and Canada isn't part of the DR-CAFTA pact, they created a subsidiary in Nevada in order to file this lawsuit.

If Pacific Rim gets away with this, it will give a green light to global corporations everywhere to pull this same trick. U.S. corporations could set up subsidiaries in other countries that are trade partners with the United States, in order to sue the U.S. government.

During today's protest, I'll be part of a group of us that will walk across the street and deliver an open letter to this tribunal (called the International Center for the Settlement of Investment Disputes) and to the president of the World Bank, who chairs the tribunal's administrative council.

The letter, signed by over 240 labor unions and other international organizations representing more than 180 million people, demands that El Salvador's domestic governance processes and national sovereignty be respected and that the Pacific Rim case be thrown out. This is the 99 percent standing up to the 1 percent. We're saying: You must stop trampling on democracy.

John Cavanagh is Director of the Washington-based Institute for Policy Studies. In August, he published in The Nation , with Robin Broad the article Like Water for Gold in El Salvador.

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