CAFTA Investor-State Cases
Pacific Rim Mining Corp vs. Republic of El Salvador
Lori Wallach speaking about the Pacific Rim case at the National Press Club.
Photo credit: Friends of the Earth
Pacific Rim Mining Corp., a Canadian-based multinational firm, sought to establish a massive gold mine using water-intensive cyanide ore processing in the basin of El Salvador's largest river, Rio Lempa.
This proposed project as well as applications filed by various companies for 28 other gold and silver mines, generated a major national debate about the health and environmental implications of mining in El Salvador, a densely populated country the size of Massachusetts with limited water resources.
Leaders of El Salvador's major political parties, the Catholic Church and a large civil society network expressed concerns. In the face of growing opposition, Pacific Rim never completed a feasibility study necessary to obtain an exploitation permit for its mine, called "El Dorado," and in July 2008 ceased exploratory drilling.
In December 2008, the firm filed a claim under the Central America Free Trade Agreement (CAFTA), demanding hundreds of millions in compensation from one of the hemisphere's poorest countries. Meanwhile, in El Salvador, the mining debate continues. Intimidation and threats against civic groups have escalated. In the past year, three prominent anti-mining activists were murdered.
As the Obama administration begins talks on its first prospective trade pact, the Trans-Pacific Partnership, the Pacific Rim CAFTA case again spotlights the concerns that have led many in Congress and U.S. civil society to demand changes to the past model of trade pact investor rights and an end to their private enforcement. Tribunals have ordered over $200 million in payments to investors under similar terms in the North American Free Trade Agreement (NAFTA).
- CAFTA Investor Rights Undermining Democracy and the Environment: Pacific Rim Mining Case
- Blog Post: El Salvador loses on three out of four counts, as anti-environment and anti-development case launched under CAFTA drags on (June 4, 2012)
- CAFTA Ruling Continues Corporate Attack on Environmental Protection (June 2, 2012)
- Pacific Rim CAFTA Challenge of Salvadoran Environmental, Mining Safety Policies Given Go-Ahead by Tribunal (August 3, 2010)
- Huffington Post: Lori Wallach: CAFTA Attack on Green Polic (August 4, 2010)
- The Nation: How Sustainable is "Socially Responsible" Mining (February 17, 2010)
- The Guardian: Stop Private Firms Exploiting Poor States (February 5, 2010)
Commerce Group Corporation vs. Republic of El Salvador
The Commerce Group Corporation, a mining firm registered and based in Wisconsin, is the second multinational company to attack El Salvador's environmental policies under the controversial investor rights of the Central America Free Trade Agreement (CAFTA). The company's environmental permits for its gold mining and milling operations in Northeastern Salvador were revoked after the company failed its environmental audit; in April 2010, the Salvadoran Supreme Court ruled that the company had been accorded due process during and after the audit.
- Backgrounder: CAFTA Investor Rights Undermining Democracy and the Environment: Commerce Group Case
- Statement: Commerce Group CAFTA Ruling Highlights Threat of Foreign Investor Rules Also Included in Korea FTA: Even as Mining Firm's Frivolous Challenge of Environmental Policy Is Dismissed on Technicality, El Salvador Must Pay $800,000 (March 15, 2011)