By Leonel Flores, ARPAS Editorial

Last week the Legislature of El Salvador amended the Investment Law so that disputes between foreign investors and the state are settled in local courts before going to arbitration bodies such as the International Centre for Settlement of Investment Disputes (ICSID ).

The reform, which has gone unnoticed even by social movement organizations that reject the demands of transnational corporations in the ICSID, is of prime importance because it returns a hint of the country's sovereignty, sovereignty tainted by free trade agreements, bilateral investment agreements and by the Investment Act itself.

 

For several years, organizations such as the National Roundtable Against Metallic Mining have been raising the need to reform the Investment Law and the country to withdraw its ICSID membership to avoid law suits such as the ones launched by Pacific Rim and Commerce Group that require our government pay hundreds of millions in compensation for denying permits to extract mineral from the subsoil.

The above mentioned amendment to the Investment Law may be considered a positive step, albeit and insufficient one if there still exist commercial treaty provisions and other legal instruments that allow multinational corporations to sue the state under international arbitration centers where the balance of power is tilted in favor of corporate interests.

In this regard, it is necessary that the public ask the Legislative Assembly to change the legal framework that benefits transnational corporations at the expense of the State, and to repeal the entire neoliberal legal structure that ARENA governments implemented for corporate interests to prevail over the national interest of our country and the national public interest.

Similarly, we should pressure the Constitutional Chamber of the Supreme Court to declare unconstitutional the FTA with the United States and also present demand of unconstitutionality against the Association Agreement with Europe (ADA). This is necessary, because it is not possible to build a new model (democratic, inclusive, equitable and sustainable) without eliminating the neoliberal legal structures that sustain it: regressive tax provisions, laws promoting tax evasion and avoidance, free trade, etc.., etc.

Last week the Legislature of El Salvador amended the Investment Law so that disputes between foreign investors and the state are settled in local courts before going to arbitration bodies such as the International Centre for Settlement of Investment Disputes (ICSID ).

The reform, which has gone unnoticed even by social movement organizations that reject the demands of transnational corporations in the ICSID is of prime importance because it returns a hint of the country's sovereignty, sovereignty tainted by free trade agreements, bilateral investment agreements and by the Investment Act itself.

For several years, organizations such as the National Roundtable Against Metallic Mining have been raising the need to reform the Investment Law and the country to withdraw its ICSID membership to avoid law suits such as the ones launched by Pacific Rim and Commerce Group that require our government pay hundreds of millions in compensation for denying permits to extract mineral from the subsoil.

The above mentioned amendment to the Investment Law may be considered a positive step, albeit and insufficient one if there still exist commercial treaty provisions and other legal instruments that allow multinational corporations to sue the state under international arbitration centers where the balance of power is tilted in favor of corporate interests.

In this regard, it is necessary that the public ask the Legislative Assembly to change the legal framework that benefits transnational corporations at the expense of the State, and to repeal the entire neoliberal legal structure that ARENA governments implemented for corporate interests to prevail over the national interest of our country and the national public interest.

Similarly, we should pressure the Constitutional Chamber of the Supreme Court to declare unconstitutional the FTA with the United States and also present demand of unconstitutionality against the Association Agreement with Europe (ADA). This is necessary, because it is not possible to build a new model (democratic, inclusive, equitable and sustainable) without eliminating the neoliberal legal structures that sustain it: regressive tax provisions, laws promoting tax evasion and avoidance, free trade, etc.., etc.