Let me introduce myself as does my business card: I am a professor of development. I am aware that most mainstream economists – and even many so-called development professionals — define progress primarily through the lens of aggregate economic growth. Yet, my recent research in El Salvador shows why this definition of progress is wrong.
El Salvador is poor by almost any economic measure, be it per capita gross domestic product or per capita income. But a rich vein of gold lies buried beneath its mountains. This has led some prominent individuals in that country to argue that gold mining is the ticket to economic growth and therefore “development.” Former Salvadoran finance minister and mining company advisor Manuel Hindssaid that renouncing mining would be “globally unprecedented” and “unjustifiable.”
This is, of course, what mainstream economic theory would have one believe.
Yet, as is often the case with field research, my travels deep into mining country in El Salvador in 2011 and 2012 and interactions with ordinary Salvadorans there revealed the reality of what “development” is and what it is not. Salvadoran farmers told me about mining executives from the Canadian firmPacific Rim and others coming into their towns around eight years ago as mining prices started to skyrocket (gold prices have gone from under $300/ounce in 2000 to over $1,600 today). The companies promised prosperity; they said that mining was the only chance for “development.”
Tom Shrake, el veterano estadounidense de la industria minera, quien lidera la empresa minera Pacific Rim Mining con sede en Vancouver, no es nada menos que un optimista.
Sus problemas nunca terminan: Su personal en El Salvador ha enfrentado intimidación a punta de pistola por parte de opositores locales a su propuesta de mina.Grupos opositores a la minería han acusado a su empresa de involucrarse en los asesinatos de activistas locales, alegatos que él niega con vehemencia y dice no están fundamentados en pruebas.
El gobierno del pequeño y empobrecido país ha decidido impedir toda la minería dentro del territorio nacional de El Salvador por miedo de que un accidente pueda contaminar la fuente de agua del país. Pero Shrake dice estar comprometido con sacar oro y sostiene él, sacar a la población local del norte de El Salvador de la pobreza.
Este mes, recibió luz verde de un tribunal de inversiones del Banco Mundial en Washington para seguir luchando para llevar a cabo su plan - un conflicto observado atentamente por la industria minera, abogados internacionales de inversiones, y activistas contra la minería.
“No queremos acudir a los tribunales.Nunca quisimos acudir a los tribunales…pero no nos dejaron otra opción” dijo Shrake durante una entrevista en Reno, Nevada, donde trabaja.
Es en Washington, lejos de la precaria política de Centroamérica, donde Pacific Rim ha lanzado la controversial medida de llevar el litigio contra el gobierno de El Salvador frente un panel de árbitros. Una práctica creciente en un mundo donde inversionistas extranjeros buscan cada vez más resolver conflictos ante paneles supuestamente neutrales en vez de apostarle alas cortes nacionales.
Pacific Rim está confrontando la decisión del gobierno de no otorgar permisos a un proyecto de minería de oro llamado El Dorado.Esta “progresiva expropiación” alega la empresa, no ha dejado nada de los $77 millones invertidos.Está demandando cientos de millones en recompensa.
En una muy esperada decisión preliminar del 1 de junio, el tribunal del Centro Internacional de Arreglos de Diferencias Relativas a Inversiones (CIADI), botó el intento de Pacific Rim de utilizar una subsidiaria estadounidense para demandar reparaciones amparadándose en el Tratado de Libre Comercio entre los EEUU y Centroamérica (CAFTA).Sin embargo, dictaminó que el caso de la empresa contra El Salvador puede seguir bajo la ley nacional de inversiones, la cual permite que litigios de inversionistas extranjeros se remitan a tribunales arbitrales.
Desde que empezó el litigio, Pacific Rim ha reducido drásticamente sus operaciones y ha visto sus acciones desplomarse.
Shrake atribuye la oposición que su mina ha enfrentado a “forajidas” organizaciones no-gubernamentales, incluyendo a Oxfam América, a quien él acusa de respaldar a grupos locales que han utilizado amenazas e intimidación.Un vocero de Oxfam America negó que hayan apoyado o promovido cualquier forma de violencia.
Shrake afirma que la acusación de que su mina pone en peligro un río clave no tiene fundamento.Los diseños de las instalaciones de la empresa incluyen protecciones ambientales del estado del arte y el uso del cianuro de la mina tendría las últimas garantías de protección, como una piscina forrada que pretende detener cualquier fuga, dijo.
Luis Parada, ex-diplomático salvadoreño quien ahora es abogado en el bufete Foley Hoag LLP, con sede en Washington, y que está actuando para el país en su disputa con Pacific Rim, dijo que el gobierno tiene el derecho a decir no.
“Existen preocupaciones ambientales legitimas,” dijo Sr. Parada, resaltando que el país es vulnerable frente los terremotos y derrumbes y que cualquier contaminación sería un “potencial desastre” para la fuente de agua del país.
El Salvador alega que Pacific Rim no es propietario de todo el terreno, ni tiene la autorización necesaria de los dueños para su permiso de minería.La empresa dice que ha asegurado las autorizaciones requeridos de los dueños de tierra.
El Salvador, además, acusó a Pacific Rim de un “abuso del proceso” al trasladar su subsidiaria de las Islas Caimanes a los Estados Unidos en parte para aprovechar las provisiones del acuerdo de CAFTA, el cual no incluye Canadá.
Abogados de la Calle Bay quienes ven el número creciente de litigios entre países e inversionistas dice que empresas como Pacific Rim han intentado ser creativos al mover o establecer sus subsidiarias por anticipado para asegurar que puedieran gozar de estos acuerdos comerciales.Sin embargo, en este caso, el intento de Pacific Rim de ampararse en CAFTA fracasó.
Mientras Canadá firma más acuerdos con protecciones para sus inversionistas y sus empresas mineras siguen buscando minerales por todo el mundo, se mantiene a la expectativa que más y más litigios se lleven a este tipo de tribunal. Los críticos dicen que estos tribunales constriñen injustamente a los gobiernos.
A pesar de todo lo que ha pasado, Shrake dice que no quiere ganar dinero a El Salvador: Él quiere los permisos para instalar su mina, la cual sostiene que daría empleo a 700 personas, y ser el contribuidor más grande de impuestos en el país.
“No soy resentido.Yo quiero al pueblo de El Salvador.He trabajado en siete países diferentes y ellos son el pueblo más trabajador que he visto en mi vida. Merecen algo mejor.”
Pacific Rim President's Claim that He Wants to Help El Salvador Leaves Many Unconvinced
A lengthy article featuring Pacific Rim CEO Tom Shrake published on June 19th by the Toronto based Globe and Mail has come under criticism from groups like Oxfam America and Mining Watch Canada.
The first paragraphs of the article are below, as well as a letter to the editor sent to the Globe and Mail which the newspaper decided not to publish.
Pacific Rim Mining locked in closely watched fight with El Salvador JEFF GRAY - LAW REPORTER The Globe and Mail Published Tuesday, Jun. 19 2012, 7:23 PM EDT Last updated Tuesday, Jun. 19 2012, 7:41 PM EDT
TomShrake, the American mining industry veteran who heads Vancouver-based Pacific Rim Mining Corp., is nothing if not an optimist.
He’s had no end of troubles: His staff in El Salvador have faced intimidation at gunpoint by local opponents of his proposed mine. Anti-mining groups have accused his company of involvement in the killings of local activists, charges he vehemently denies and for which he says there is no evidence. And the government of the tiny, impoverished country has decided to block all mining within El Salvador’s borders out of fear that a mishap could contaminate the country’s water supply.
But Mr.Shrakesays he remains committed to digging for gold and, he argues, digging the local population in northern El Salvador out of poverty.
This month, he got a green light to keep fighting for that plan from a World Bank investment tribunal in Washington – a fight being watched closely by the mining industry, international trade lawyers and anti-mining activists.
“We don’t want to go to court. We never wanted to go to court … But they left us no choice,” Mr.Shrakesaid in an interview from Reno, Nevada, where he is based.
In “Pacific Rim Mining locked in closely watched fight with El Salvador,” CEO Tom Shrake's assertion that "rogue" groups are responsible for opposition to mining in El Salvador is absurd. Concern about the impacts of mining in the small, water-stressed country is shared across a broad spectrum of Salvadoran society, from the Catholic Church, to government officials, to -- most importantly -- people in Cabañas, where Shrake's Pacific Rim company is seeking to operate. The communities there have legitimate concerns about the environmental and social damage that mining can cause. International organizations like ours simply support their right to peacefully express their views on whether mining operations are appropriate in their backyards.
Shrake's assertion that the proposed mine would not endanger local water supplies is also just that, an assertion. Pacific Rim has never presented any actual plan or study to update its rejected 2005 environmental impact statement. No country should be obliged to allow a project to proceed without presenting an acceptable environmental impact statement. If Shrake really wants to help the people of El Salvador, he should drop his lawsuit against the Salvadoran government and respect its legitimate right to protect the environment and local communities.
Sincerely,
Keith Slack Global Program Manager Oxfam America Washington, DC
When it Comes to Mining, the Canadian Government has a Closed Door Policy, Even to Canadian Citizens
On Wednesday June 13, the National Roundtable against Metallic Mining (the Mesa) held a rally in front of the Canadian Consulate to ask the Canadian Government to stop its free trade agreement negotiations with El Salvador, and withdraw its support for Canadian mining company Pacific Rim.Two Canadian citizens, as well as a delegation visiting from Baltimore, MD, accompanied the rally.
When the Mesa’s Canadian allies attempted to enter into the consulate building to present a letter with the Mesa’s concerns, security guards wouldn’t even let them through the door.Eventually, the Ombudsman for Human Rights’ Office was called to the scene and the group was told that only one of the two Canadians present would be allowed to enter, and that they would only be allowed in if they had some sort of problem with their passports or immigration paperwork.
Erika Stahl, one of the frustrated Canadians denied entry said on her blog, “This is outrageous treatment. Any citizen of any country is allowed to enter their embassy while traveling abroad - that's what embassies are for. Your political affiliations don't affect this basic right, nor do your stances on controversial issues. The embassy is Canadian territory. As citizens, we have the right to enter our territory. They do not have the right to refuse entry to law-abiding Canadians.”
This attitude from the Canadian government shows their closed door policy for anyone associated with mining opposition, which apparently extends to Canadian citizens abroad.
Pictures of the activity can be found hereand here
For Spanish press coverage of the activity in CoLatino see here and here.It was also covered by News Millennium.
The National Roundtable against Metallic Mining Rejects the Free Trade Agreement with Canada
On June 1st, the International Centre for the Settlement of Investment Disputes (ICSID) ruled that Pacific Rim, a Canadian mining company, has the right to sue the Government of El Salvador for not allowing the El Dorado mining project in Cabañas.Now, the Salvadoran government will be forced to prove that its refusal to grant mining permits is a sovereign public policy decision that any country could make and that it is not a decision taken on a whim by the government.
Our protest today, in front of the Canadian Consulate, is to condemn precisely this type of mercenary attitude from corporations like Pacific Rim, who are wrapped up in the middle of the neoliberal model, and that take advantage of trade agreements to extort governments when there is a conflict of interest.We demand that the Canadian Government stop protecting and promoting this vicious mining company and force that it withdraw its suit against El Salvador in the ICSID.The arbitration that Pacific Rim filed through CAFTA and Salvadoran Investment Law against the Government of El Salvador for $120 million should be sufficient evidence to prove the mercenary attitude of corporations.
We assert that this situation is due to the implementation in our country of neoliberal structures for trade liberalization, and the privatization of services and public goods that has been promoted by ARENA governments.The free trade agreements that were signed and are now in effect, on top of eroding sovereignty, put the social, economic and labor rights of the population at risk.
As the National Roundtable against Metallic Mining, we energetically condemn that El Salvador’s sovereignty and the population’s wellbeing are subjected to the plans of tribunals that are designed to promote corporate interests while at the same time legitimizing the pillaging and destruction of the planet.
Our struggle against mining has forced us to reject the hidden negotiations that El Salvador is entering into for a Free Trade Agreement with Canada, which is based on the agreement signed with the United States.Canada is a country which receives more than 4% of its GDP from mineral extraction from other countries and that will not have other investment interests besides mining.
For this reason, we call on the Canadian Government to stop the free trade negotiations with El Salvador and that at the same time to stop protecting Pacific Rim and to force the company to withdraw its ICSID suit against the Government of El Salvador.
Stop the multi-million dollar suit of Pacific Rim against the Salvadoran Government in the ICSID! NO to the Free Trade Agreement with Canada.
Pac Rim’s press release titled Pacific Rim Mining Arbitration Case to Proceed Under El Salvador Foreign Investment Law; CAFTA Portion of Claim Dismissed by ICSID was also picked up and reprinted in Market Wire, RohstoffWelt, Yahoo! Finance, and Contact Latino News
The ICSID Rules the Pacific Rim Case will Continue
As the clock ticked towards five pm on Friday, June 1st, the International Centre for the Settlement of Investment Disputes (ICSID) released its ruling in the Pacific Rim vs. the Government of El Salvador case. For background on the case see here.
The ICSID tribunal 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 Salvadoran Investment Law states that companies can sue the Salvadoran government through ICSID. Therefore, the case will proceed to a third round of hearings.
As one source analyzing the decision put it:
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.
U.S. and Canadian Organizations Respond
Public Citizen and Sierra Club responded to the decision in a press release saying “ The fact that corporate attacks on a sovereign country’s domestic environmental policy before a foreign tribunal would even be possible – much less cost a country millions when a key element of the attack is dismissed – highlights what is wrong with our ‘trade’ agreement model,” said Lori Wallach, director of Public Citizen’s Global Trade Watch. “These investor rules are an outrageous example of how ‘trade’ pacts have been stuffed with special-interest terms that empower corporate attacks on basic democratic public interest policymaking at home and abroad.”
The Institute for Policy Studies released their own statement where Director John Cavanagh said “The world should applaud the efforts of the Salvadoran people to safeguard their country’s long-term health and prosperity by becoming the first in the world to ban gold mining. Instead, this ruling is one more example of international investment rules undermining democracy in the interest of short-term profits for foreign investors.” Spanish Version
From Canada, Mining Watch Canada covered the decision and said "The lawsuit has been and will continue to be costly. To date, El Salvador has had to spend at least $5 million of public funds in legal fees. Five million dollars could provide one year worth of adult literacy classes for 140,000 people in El Salvador or feed 60,570 families in temporary housing for a full two weeks during a natural disaster. One would presume that the small junior mining company has paid out a similar amount and one wonders how long its few remaining shareholders will hang on for the risky ride. "
Oxfam American also showed their disappointment to the ruling in their press statement, “We are very disappointed by (ICSID’s) decision to rule against El Salvador. It goes against the views the Salvadoran people who are overwhelmingly against mining,” said Keith Slack, manager of Oxfam America’s oil, gas and mining program. “We are concerned that the continued presence of Pacific Rim in El Salvador will contribute to further human rights abuses. We urge Pacific Rim not to pursue this case and to listen to the voice of the Salvadoran people.”
Response from El Salvador
In El Salvador, the ">National Roundtable against Metallic Mining held a press conference on Friday andissued a written statement on Saturday in response to the ruling. In their statement they highlighted the need for reforms in order to protect El Salvador from these types of attacks:
"[...]President of the Republic Mauricio Funes today, in his speech after three years of government, [...] referred reforms 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."">Video of the Mesa’s press conference regarding the Pacific Rim decision
Somewhat surprisingly,the Attorney General’s Office is construing the decision as a success.In a post on the AG’s website, it says “It was made clear that during the preliminary stages of arbitration, Pacific Rim was incapable of refuting the evidence presented by El Salvador…”However, after review of the document, analysts in the U.S. and El Salvador alike coincide that El Salvador actually lost on three of its four main arguments, and that while the CAFTA claim was thrown out the case will continue essentially intact.
At about 12:30 pm on Saturday, around 200 of organizers from El Salvador, Canada, the U.S., and all over the world who were participating in the "Shout Out Against Mining Injustice" marched about 6 blocks from the "Shout Out" to PacRim headquarters in the middle of Vancouver's mining and financial center to show their opposition to the Pacific Rim case and their outrage that the ICSID ruled that it should continue. For more information see here.
