Pacific Rim Increases its “Transnational Extortion” Lawsuit to $315 Million

On Wednesday April 4^th, the communities and organizations that make up the National Roundtable Against Metallic Mining held a press conference rejecting the actions of the company Pacific Rim, which recently increased it´s lawsuit against El Salvador from $105 million dollars to $300 million. The Mesa declared:

“This lawsuit is an attempt to undermine the Salvadoran government’s right to practice economic policy based on public interest. Pacific Rim’s announcement also demonstrates its contempt for the will of the Salvadoran population that has time and again exercised their right to say no to metallic mining. Resource extraction is not an option for development in our country due the serious dangers it posses to people’s health and the environment, we are particularly concerned about the impact on our precarious water resources.”

Read more of the Mesa’s press statement below.

Watch a video of the press conference>>

Again, the company Pacific Rim has sued the country. Yesterday, the Canadian mining company turned again to ICSID (International Centre for Settlement of Investment Disputes) to demand that the government pay $314 million for denying the company the permit to operate a mine in Cabañas.

In 2009, Pacific Rim sued the Salvadoran state for $100 million, relying on the free trade agreement with the U.S. (CAFTA). However, in 2012 the ICSID rejected the Pacific Rim use of CAFTA to sue El Salvador.

So today Pacific Rim changed is strategy and filed its lawsuit through Salvadoran Investment Law, which allows multinational corporations to sue the country using the ICSID. That law was passed by right-wing legislators in 2006, when Francisco Flores was President and Minister of the Economy was Miguel Lacayo.

And this time the Canadian mining company has tripled the original amount of its claim, seeking to extort the country for more than three hundred million dollars.
This new lawsuit by Pacific Rim reiterates the urgency of reversing regulations such as the Investment Law and CAFTA, passing a law that would prohibit metallic mining and close the door against companies like Pacific Rim . So hopefully the government and the sectors that make have the sense to protect our country will rise to this challenge.

In addition, the Salvadoran state must take the offensive against this mining company, and it has grounds to do so. If communities and environmental groups accused Pacific Rim of drying up streams, generating violence and buying off officials, why doesn’t the Attorney General and the courts prosecute the company?

If experts of the Ministry of Environment determined that several watersheds were dried up due to the exploratory  drilling of  Pacific Rim in the town of San Isidro, why not sue the Canadian company for environmental damage?

If a court in Sensuntepeque determined that several murders in the community of Trinidad had as a backdrop the climate of violence that Pacific Rim promoted between opponents and supporters of mining, why not prosecute the extractive company for promoting criminal violence?

If ARENA mayors in Cabañas promoted Pacific Rim and members of the PCN party in the Assembly took pro-mining stance, why not investigate these officials for corruption and taking bribes?

 

If we did this, the correct order of things would be restored: the defendant  in this lawsuit should not be the Salvadoran state, the defendant should be the mining company Pacific Rim.

 

PRESS RELEASE: The National Roundtable Against Mining Rejects Pacific Rim’s Increase of Lawsuit against El Salvador

Canadian mining company Pacific Rim has announced it will increase to US $315 million its demand against the Salvadoran Government for failing to grant a license to exploit gold in the El Dorado mine in its northern department of Cabañas. Pacific Rim is suing under Salvadoran Investment Laws after the ICSID tribunal dismissed their case to sue under the US, Central America Free Trade Agreement, CAFTA-DR.

 

The communities and organizations that make up the National Roundtable Against Metallic Mining reject the actions by the company Pacific Rim, because they attempt to undermine the Salvadoran government’s right to practice economic policy based on public interest. Pacific Rim’s announcement also demonstrates its contempt for the will of the Salvadoran population that has time and again exercised their right to say no to metallic mining. Resource extraction is not an option for development in our country due the serious dangers it posses to people’s health and the environment, we are particularly concerned about the impact on our precarious water resources.
 
We categorically deplore the hypocrisy of Thomas Shrake, Pacific Rim’s CEO, who insists on portraying the company as a creator of jobs and benefits for the people of El Salvador. As we have stated before, if the true intention of Pacific Rim were to help the democratic, equitable and sustainable development of the Salvadoran population, they should leave the country immediately rather than increasing the amount of the demand filed in 2009. It is a contradiction for a mining company that claims to be interested in the wellbeing of a population, to seek to extort damages for lost profits from a government that has simply acceded to the demands of its population. In particular, we are concerned about the utilization of tribunals such as the International Centre for Settlement of Investment Disputes(ICSID) to resolve conflicts with the government of El Salvador, such tribunals are undemocratic in nature and are not concerned with protecting the application of human rights nor the environment.

 

As long as our country is bound by free trade agreements and permissive legislation that favors corporate interests over the wellbeing of the population, we will be at the mercy of corporations that use legal systems with frivolous cases that compromise the public purse of El Salvador. Pacific Rim, is not the only mining company that has sued the country before the ICSID, US based company Commerce Group has also demanded a payment of US $100 million from the government of El Salvador. It is completely unreasonable that the public purse is on the hook for alleged damages while the Salvadoran public continues face deficits in social spending. The demand for $315 million represents one third of the national budget for education in El Salvador. 

 

Based on the concerns raised above, National Roundtable Against Metallic Mining calls on:

 

• The Pacific Rim Mining Company to immediately withdraw the case against the Salvadoran government.
• The president of El Salvador to stop negotiating the Association Agreement with the European Union and a Free Trade Agreement with Canada, and to consider the withdrawal of El Salvador from the ICSID as many South American countries have done.
• The legislative assembly to annul current investment laws and to pass legislation to stop mining
• The Supreme Court of Justice of El Salvador to release promptly a resolution on the constitutional challenge launched by social organizations against CAFTA-DR in 2007.
• The people of El Salvador to remain alert and organized to defend life against the extortion of multinational corporations.  

 

STOP THE ATTEMPTS OF TRANSNATIONAL CORPORATIONS TO EXTORT THE GOVERNMENT OF EL SALVADOR