World Bank Tribunal Rules the Pacific Rim Suit Against El Salvador to Continue

June 6, 2012

As the clock ticked towards five pm on Friday, June 1^st, the International Centre for the Settlement of Investment Disputes (ICSID) released its ruling in the Pacific Rim vs. the Government of El Salvador case.

The ICSID tribunal, a wing of the World Bank, ruled that it did not have jurisdiction under Central American Free Trade Agreement (CAFTA) to hear the case because Pacific Rim had not been a U.S. company long enough to sue using that mechanism. However, the tribunal did consider the ICSID to have jurisdiction under Salvadoran investment law. Article 15 of the Salvadoran Investment Law states that companies can sue the Salvadoran government through ICSID. Therefore, the case will proceed to a third round of hearings judging the merits of the case.

While many Salvadoran news sources and even the Salvadoran Attorney General misinterpreted the decision as a victory for El Salvador, members of the anti-mining movement in El Salvador and North America, were quick to show their repudiation of the decision to allow the case to continue.

The National Roundtable Against Mining declared:

“As the National Roundtable against Metallic Mining, we would like to insist that it is harmful to the economic, social and environmental interests of the country to be subjected to trade agreements, particularly CAFTA, as well as the tribunals that are formed by the ICSID… We would like to finish by referring to the words spoken by the President of the Republic Mauricio Funes today in his speech after three years of government, where he referred to reforming for some laws, among them the Investment Law. We would like to call on the government to include the elimination of Article 15 in its proposals for reforms, so as to not continue being subordinate to ICSID jurisdiction. Also, the President, in that same speech, referred to making irreversible changes in the country. Because of this, we insist in a ban on metallic mining through an explicit law which would free Salvadorans from the huge threat posed by the metallic exploitation industry.”

Another U.S. ally analyzing the decision put it this way:

“This was not a decision about the content of the case or the issues of mining and water contamination in El Salvador. This was a decision on whether the tribunal set up under ICSID has jurisdiction to hear the case at all. Pacific Rim argued that it had two different legal on-ramps to the ICSID process, one under CAFTA and the other under El Salvador investment law. The tribunal only needed to agree with them on one to let the case move forward and they decided to make it under El Salvador investment law. The bottom line is that the investment rules and ICSID system has once again paved the way for a foreign corporation to menace people with millions of dollars in forced payments, in this case for the sin of pressing their government to say no to a gold mining operation that will contaminate their water and threaten the health of their families.”

The National Rountable Against Mining and its allies have sworn to continue the fight against Pacific Rim and the violation of national sovereignty that is the ICSID tribunal. The will be escalating their demand that El Salvador government leave the ICSID and pass a law prohibiting metallic mining once and for all.

On Saturday June 2^nd, around 200 organizers from El Salvador, Canada, the U.S., and other parts of the world who were participating in the “Shout Out Against Mining Injustice” marched about 6 blocks from the “Shout Out” conference to the Pacific Rim headquarters in the middle of Vancouver’s mining and financial center. The anti-mining activists rallied in front of the headquarters to show their opposition to the Pacific Rim and their outrage over the Pacific Rim hearing.

Links to coverage of the ICSID decision in North America– Reuters Canada, a second Reuters article, Market Wire, CNBC, Oxfam America