HomeCommuniquéLandmark hearing begins at World Bank arbitration center

Landmark hearing begins at World Bank arbitration center

CISPES (Committee in Solidarity with the People of El Salvador

June 1, 2010

Contact: Alexis Stoumbelis, (202) 521-2510 ext. 205

Landmark hearing begins at World Bank arbitration center

Environmental scientists and trade policy specialists refute Vancouver-based Pacific Rim Mining’s claims in $77 million lawsuit against El Salvador

As the second day of proceedings by Pacific Rim Mining against the government of El Salvador opens at the International Centre for the Settlement of Investment Disputes (ICSID), the Vancouver-based company continues to assert its unjustified claim for at least $77 million dollars in alleged lost profits after El Salvador denied its application for mining permits.

Vidalina Morales de Gámez, a member of the National Roundtable against Metallic Mining in El Salvador declared, “The company claims that its rights were violated under CAFTA [the US-Central American Free Trade Agreement], but the company failed to fulfill its obligations under Salvadoran law.” Ms. Morales de Gámez traveled to Washington, DC last week for a series of Congressional briefings organized by Public Citizen’s Global Trade Watch and Friends of the Earth concerning CAFTA’s highly-disputed investor rights provisions. “Now Pacific Rim wants a multimillion dollar handout from El Salvador, which is money we need to pay for social programs and to create long-term jobs for the poor and working class.”

Lisa Fuller, Program Director of the Committee in Solidarity with the People of El Salvador (CISPES), which organized a series of demonstrations in cities across the US to protest Pacific Rim’s lawsuit, rejects the company’s continued assertion of economic benefit for El Salvador. “The mine, which would operate for just 6 years and employ several hundred people, would bring very minimal economic benefit to El Salvador.”

She cites El Salvador’s mining law, which requires only 2% royalties, and a recent report published by Oxfam America, Metals Mining and Sustainable Development in Central America, which concludes that “Mining usually does not bring sustainable net benefits – and it may well undermine local economic well-being.” She notes, “Pacific Rim is the only party that stands to gain economically – either by extracting gold against the will of the people or by suing El Salvador under CAFTA.”

In both 2005 and 2006 Pacific Rim applied to El Salvador’s Ministry of the Environment and Natural Resources (MARN) for exploitation permits for its El Dorado gold mining project in San Isidro, Cabañas. Both times the MARN refused to grant permits due to severe deficiencies in the Environmental Impact Assessment (EIA) and failure to complete a Feasibility Study. In a 2005 technical review, independent hydro-geologist Dr. Robert Moran concluded that Pacific Rim’s EIA “would be unacceptable to regulatory agencies in most developed countries.”

In December 2007 Pacific Rim opened a subsidiary in Reno, NV, through which it filed its Intent to Sue in December 2008, claiming that El Salvador had violated the investor rights of CAFTA’s Chapter 10. Manuel Pérez-Rocha, from the Institute for Policy Studies, which recently published a study, Mining for Profits in International Tribunals, said, “This case is exemplary of the proliferation of foreign investors that want to use free trade agreements to threaten countries that attempt to protect the human rights of their citizens.”

Pacific Rim proposes to use between 75 to 110 liters of water per second and two tons of cyanide a day; due to this severe environmental risk, local communities have organized strong opposition to the mine since 2005. In contrast to the company’s unsubstantiated claim that the local communities are in favor of the project, polls conducted at the University of Central America show that over 62% of the population is opposed to gold mining of any kind. Three prominent mining opponents, Marcelo Rivera, Ramiro Rivera and Dora Alicia Sorto Recinos, have all been murdered since June 2009.

ICSID is live video streaming the hearing proceedings, which commence at 9:30 am Eastern time each day. The proceedings will be transmitted in both English and Spanish, and will be available in high speed (256 kbps) and low speed (56 kbps) to accommodate different bandwidth capabilities.

For the hearing in English, click here: mms://wbmswebcast1.worldbank.org/live1

For the hearing in Spanish, click here: mms://wbmswebcast1.worldbank.org/live2

To access the live stream you will need Windows Media Player, which is available for download at www.windows.com

Please see a detailed background report this case, the first environmental case under CAFTA.