OceanaGold loses compensation claim against El Salvador

Published by MAC on 2016-10-16
Source: The Guardian, The New York Times, Statement

“Irrevocable damage has already been done to communities in El Salvador”

There Are No Winners: After Seven Years and Millions of Dollars, Pac Rim Mining Loses Suit Against El Salvador

Investor-State Arbitration Blackmails El Salvador, Subverts Democracy.

http://miningwatch.ca/news/2016/10/14/there-are-no-winners-after-seven-years-and-millions-dollars-pac-rim-mining-loses

14 October 2016

(Cabañas, El Salvador/Washington DC/Ottawa/Melbourne) Civil society groups worldwide that support Salvadoran communities and organizations working on mining and environmental issues cheered today’s decision by the ICSID tribunal that Pacific Rim/OceanaGold’s $250 million lawsuit against El Salvador is without merit.

In a ruling released today, the investment tribunal rejected the company’s claims and ordered it to pay $8 million in legal fees and costs to the government of El Salvador.

In 2009, Pac Rim Cayman LLC brought an “investor-state dispute settlement” (ISDS) case against El Salvador before the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The company, now a wholly-owned subsidiary of the Canadian-Australian company OceanaGold, sued El Salvador for alleged losses of potential profits as a result of not being granted permits for a gold mining project. The company had failed to meet regulatory requirements for the permits.

“The fact that Pac Rim – now OceanaGold – could sue El Salvador, when it has never had a licence to operate, is an abuse of process,” says Manuel Pérez-Rocha of the Institute for Policy Studies. “That these suits take place far from any transparent, independent court system undermines democracy in El Salvador, and around the world.”

This case is part of what led the Government of El Salvador to decide not to issue new mining permits. That decision has widespread support in El Salvador; a recent poll of the University of Central America (UCA) indicates that 79.5% of Salvadorans are against any gold mining.

“Irrevocable damage has already been done to communities in El Salvador,” says the Salvadoran Roundtable against Metallic Mining (La Mesa). “Pac Rim’s presence in El Salvador has fomented local conflict, which has led to threats, attacks, and assassinations. We want OceanaGold, and all the misery it has caused, out of El Salvador, and for the government to enact a prohibition on any metal mining.”

“By allowing transnational companies to blackmail governments to try to force them to adopt policies that favor corporations, investor-state arbitration undermines democracy in El Salvador and around the world,” says Marcos Orellana of the Center for International Environmental Law (CIEL). “Regardless of the outcome, the arbitration has had a chilling effect on the development and implementation of public policy necessary to protect the environment and the human right to water.”

“This is one of now far too many examples of Canadian mining companies making use of international arbitration to bully governments when their mine projects lack community consent and have not met legal or regulatory requirements. In contrast, communities have no effective means to hold these same companies to account for the systematic and serious harms resulting from their operations”, comments Jen Moore of MiningWatch Canada.

“What we have now is a clear example of what is wrong with investor-state-dispute-settlement clauses, whether they are inserted in domestic laws or bilateral or multilateral investment agreements. El Salvador’s experience confirms the threats to human rights and the environment that occur when corporations bring a suit to tribunals like ICSID,” explains Robin Broad, professor at the American University.

“A mining company that calls itself responsible should not be using mechanisms like ICSID to force governments to do its bidding. Countries like El Salvador have a right to say no to mining without fear of a massive lawsuit”, says Keith Slack of Oxfam America.

“At a time of water scarcity, it is unconscionable for the global trade and investment regime to deny governments of water-stressed countries like El Salvador the policy space to protect local watersheds and ensure the realization of the human right to water,” says Maude Barlow, national chairperson of the Council of Canadians.

“Let us be clear: El Salvador has not ‘won’ anything in this arbitration. El Salvador had to pay more than $12 million just to defend itself. These legal costs are enough to pay for over 2 years of adult literacy classes for 140,000 people. At a minimum, OceanaGold should reimburse El Salvador for the costs of this suit, which never should have taken place. And it should also be responsible for the social and environmental damage left in its wake,” says Jamie Kneen of MiningWatch Canada.

Contacts:
Amanda Kistler, CIEL - akistler@ciel.org, +1 202 742-5832
Jamie Kneen, MiningWatch Canada - jamie@miningwatch.ca, +1 613 569-3439, cell +1 613 761-2273
Manuel Perez Rocha, IPS - manuel@ips-dc.org, + 1 240 838 6623
Laura Rusu, Oxfam America, laura.rusu@oxfam.org +1 202 459 3739
Robin Broad, American University, rbroad@american.edu, + 1 202 885 1478

Notes to editors:
The International Allies against Mining in El Salvador is made up of organizations from Australia, Canada and the United States that support the Salvadoran people as they demand sovereignty, the right to water, healthy communities and a clean environment. Each of the organizations that make up the Allies has a history of solidarity work with El Salvador. More information is available at: www.stopesmining.org

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El Salvador Wins Dispute Over Denying a Mining Permit

Elisabeth Malkin

http://www.nytimes.com/2016/10/15/world/americas/salvador-mining-dispute.html?_r=1

14 October 2016

MEXICO CITY — The government of El Salvador won a long-running legal battle on Friday when an international arbitration panel ruled that it did not have to pay compensation to a mining company that was denied a concession to drill for gold.

The case had been watched by antimining activists, who had pointed to it as a test of the rights of governments to make laws protecting their citizens’ health and the environment against challenges from corporations.

The panel, the International Center for Settlement of Investment Disputes, at the World Bank in Washington, accepted El Salvador’s argument that the company, Pac Rim Cayman, did not meet all the legal requirements to receive a permit.

The ruling was a relief to the Salvadoran government, which faced a demand for $314 million in compensation from Pac Rim Cayman for the loss of expected profits from the mining venture.

“What is clear is that investments are welcome if they respect institutions, if they respect the environment and health,” Lina Pohl, El Salvador’s environment minister, said in a phone interview from San Salvador, the capital.

The World Bank panel, known as Icsid, is a little-known body that arbitrates disputes initiated by private companies that argue that their rights as investors have been violated by governments.

Many free-trade agreements incorporate the rights of foreign investors to seek redress from the panel. Activist groups argue that private companies are using the dispute center to fight regulation.

“The case has been hanging over El Salvador, and the company used this case to try to get permission to work there,” said John Cavanagh, the director of the Institute for Policy Studies, a left-leaning think tank in Washington.

OceanaGold, a Canadian-Australian mining company that acquired Pac Rim’s Canadian parent company in 2013, said the company had been seeking an “amicable resolution.” While OceanaGold was disappointed with the outcome, it respected the opinion of the arbitration panel, said Darren Klinck, the executive vice president for corporate development.

The case that Pac Rim brought to the three-person panel proved to be so weak that the finding against it was unanimous. The company had never acquired the rights to all the land it wanted in its concession, which the government rejected in 2005.

The suit was filed in 2009, after El Salvador’s government declared a moratorium on mining concessions.

An outside evaluation commissioned by the government later argued that El Salvador’s water supply was too threatened, its institutions too weak and its land titles too conflicted to allow mining. “The country doesn’t have conditions for mining,” Ms. Pohl said.

Jamie Kneen, a spokesman for Mining Watch Canada, said that El Salvador’s legal victory did not diminish the threat that companies would go to the arbitration panel in future cases.

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World Bank tribunal dismisses mining firm's $250m claim against El Salvador

OceanaGold ordered to pay $8m legal costs after claim that El Salvador’s refusal to let it mine gold caused huge loss in potential profits is thrown out.

Claire Provost and Matt Kennard

https://www.theguardian.com/global-development/2016/oct/14/el-salvador-world-bank-tribunal-dismisses-oceanagold-mining-firm-250m-claim

14 October 2016

An international tribunal has dismissed a multinational mining company’s demand that the government of El Salvador pay $250m (£205m) in compensation for refusing to allow it to dig for gold in the tiny Central American country where the slogan, “No to mining, yes to life” has become a national rallying cry.

The tribunal, which ruled that OceanaGold’s case was without merit, also ordered the firm to pay the Salvadoran government $8m to cover the majority of the country’s legal costs.

“For the people of Cabanas who have been fighting to defend their environment, it is mission accomplished,” said El Salvador’s attorney general, Douglas Meléndez Ruiz. “It is an important step for the country to have been victorious in this lawsuit.”

While an OceanaGold statement expressed disappointment at the verdict, the outcome was celebrated by civil society groups from El Salvador to Canada, although they questioned why the ruling in a case dating back to 2009 had taken so long.

Bernardo Belloso, president of the Association for the Development of El Salvador, part of a national roundtable opposed to metallic mining, said the ruling “vindicates our right to determine our own development path”.

But he added: “This is a law suit that should never have been allowed. The millions of dollars that El Salvador has spent in legal costs could have been used to strengthen badly needed social programmes in our country.”

The verdict marks the culmination of more than seven years of deliberations, largely behind closed doors, at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

In 2009, the Canadian mining company Pacific Rim – since acquired by the Australian-Canadian mining firm OceanaGold – filed a case at the centre claiming that El Salvador had unfairly refused to grant it a concession to start digging at its El Dorado mining project.

The company said the government had encouraged it to spend “tens of millions of dollars to undertake mineral exploration activities” near the central Salvadoran department of Cabañas, only to withhold necessary permits once valuable deposits were discovered.

At the same time, the firm sued El Salvador alleging the loss of potential profits. The sum sought by the company, which was revised several times over the course of the dispute, at one point exceeded $300m – almost twice the $158m in international aid that El Salvador received in 2014.

El Salvador, where almost a third of the population lives under the national poverty line, spent more than $12m on its legal defence. It maintained throughout the case that OceanaGold failed to meet regulatory requirements for the requested permits. The country said OceanaGold lacked crucial environmental permissions, did not hold the rights to much of the land required for its project, and failed to submit a final feasibility study.

The ICSID case against El Salvador is one of hundreds that corporations have filed against governments under the investor-state dispute settlement (ISDS) system, a mechanism enshrined in thousands of international trade and investment treaties and some domestic laws.

The system has become a flashpoint for opposition to the proposed Transatlantic Trade and Investment Partnership between the US and Europe, which would further extend the reach of ISDS.

Jen Moore, Latin America programme coordinator at MiningWatch Canada, said: “This ruling is a relief, but it is not a win. This already costly suit should never have been able to take place. For seven years, it has put a chill on policymaking that could respect the decision of Salvadorans to prohibit metal mining and protect local communities and the environment.”

Too many corporations, she added, have used the ISDS system to “bully governments and undermine local opposition to mining given its devastating impacts, and this must stop”.

Meera Karunananthan, a water campaigner for the Council of Canadians, said the case against El Salvador should serve as a cautionary tale.

“Salvadoran movements have been pushing for bold initiatives addressing the country’s environmental challenges, including a more robust water policy and a permanent ban on metal mining, but these policy proposals have been stalled under the threat of this lawsuit,” she said.

“As long as the country is forced to adhere to trade and investment rules that enabled the lawsuit in the first place, it will be extremely challenging for Salvadorans to maintain their sovereignty over environmental and social policy.”

Manuel Pérez-Rocha, an associate fellow of the Institute for Policy Studies in Washington, said: “The fact that it took more than seven years to release the ruling, and that a country with so many economic difficulties like El Salvador has had to pay millions for its defence, is immoral and shows the complete discretion with which these tribunals sponsored by the World Bank, and its infamous ICSID arm, operate.”

OceanaGold said in a statement that it had inherited the dispute when it acquired Pacific Rim and had always sought an amicable resolution that “would benefit all parties”.

The statement added: “The company believes that a modern resource industry that operates in a safe and sustainable manner and within internationally recognised best practices has the potential to unlock a sustainable and multi-decade development opportunity for the Republic of El Salvador. However, the company recognises that the Government will need to take positive and definitive steps towards establishing a stable business environment if it wishes to attract foreign investment to establish this opportunity.”

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The Struggle Continues Against Oceanagold

IPCM statement - http://www.peoplesminingconf.net/thestrugglecontinues

15 October 2016

The decision is finally out! The International Centre for Settlement of Investment Disputes (ICISD), has just ruled that OceanaGold’s case against the Government of El Salvador is without merit and the Government of El Salvador will not have to pay the company the $250 million it is demanding for alleged losses caused by a national mining moratorium executed by El Salvador. The country will also be awarded $8 million to cover legal costs for the claim.

The process leading to this decision has marked another milestone for the collective action of peoples in different countries resisting large-scale mining Trans National Corporations (TNCs), like OceanaGold. This lawsuit does not only show a glimpse of what is at stake with the moribund neoliberal free-trade agreements like the Trans-Pacific Partnership Agreement (TPPA), or the Regional Comprehensive Economic Program (RCEP), it also reveals the relentless commitment of people across borders in building movements to defeat a mining giant in the world today.

Across the world, anti-mining networks stand in solidarity with the people of El Salvador. As a nation, they have defined and challenged the boundaries of TNC’s extractive operations by asserting their sovereignty against Canadian-Australian owned OceanaGold Corporation. The government of El Salvador did the correct and necessary step to prioritize its constituencies demand for clean water and a healthy environment. We remember the painstaking organizing that was met by threats, intimidation and even death. Marcelo Rivera, Ramiro Rivera Gómez, Felicita Echeverría, and Dora “Alicia” Recinos Sorto (who was eight months pregnant) were murdered because of their deep involvement of the campaign.

International solidarity poured in to strengthen the campaign against OceanaGold from various fronts. In August 2015, the International People’s Conference on Mining (IPCM) undertook a coordinated campaign against OceanaGold whereby a Campaign Core Group was created comprising of the following organizations: Kalikasan PNE, Amianan Salakniban, and the Alyansa ng Nagkakaisang Novo Vizcayano para sa Kalikasan (ANNVIK) of the Philippines, Pacific Resource Asia Center of Japan, Kairos Canada, Canadian Catholic Organization for Development and Peace, Action for Peace and Development in the Philippines (APDP), ANCoMP (Australian National Campaign on Mining in the Philippines), Migrante of Australia, and Radio Victoria and Asociation de Desarrollo Economica Social Santa Marta of El Salvador.

Several protest actions have since been conducted across the globe. In the recent OceanaGold General Assembly in Toronto Canada on June 9, 2016, Canadian solidarity groups denounced the environmental and human rights violations of OceanaGold in the Philippines and El Salvador.

On June 21, 2016, Mines and Communities protested in front of the venue of the Mining Confab in London where an OceanaGold official was one of the main speakers. In Australia, workers’ unions, migrant groups, and environmental groups continue to have regular protest actions on the last Friday of every month to expose the horrific record of OceanaGold. The last one was on Sept 30, 2016.

In El Salvador, there is a strong solidarity network linked to the Stop ES Network in the United States supporting the campaign against OceanaGold’s demand for $250 million in losses to be paid by El Salvador. Several actions have been taken to pressure OceanaGold and the World Bank to drop the case.

Since June 17, 2016, there continues to be an ongoing community barricade in Didipio, Nueva Vizcaya, Philippines which has led to a temporary stop to the expansion of OceanaGold in that location.

On July 16, 2016, Kalikasan, together with the Filipino scientist group AGHAM, the USA chapter of Filipino multi-sectoral alliance BAYAN (New Patriotic Alliance), IPCM, and the International Allies against Mining in El Salvador (Stop ES Mining) launched the international campaign on OceanaGold in a forum in New York.

At this year’s World Social Forum, Kalikasan People;s Network for the Environment, MiningWatch Canada, Kairos Canada, Development and Peace Canada, and Accion Ecologica Ecuador, convened a strategy workshop particularly for OceanaGold. It forged an international people’s campaign to further strengthen the demand to hold OceanaGold accountable for its atrocities committed in the countries where it has abused and exploited.

While the national campaigns and local resistance against OceanaGold operations in the Philippines and El Salvador continues, solidarity campaigns and groups in Australia, Canada, Japan and US have pledged to provide the needed international exposure and support.

In the Philippines Department of Environment and Natural Resources (DENR) Secretary Gina Lopez recommended OceanaGold for suspension for the reason that there had been strong opposition of local communities and the Local Government Unit (LGU).

And most recently, in anticipation of the ICISD decision, groups and networks of El Salvador had a protest action in front of World Bank’s headquarters last October 7, 2016 and in the Philippinesin front of OceanaGold’s office last October 13, 2016.

Now more than ever, the world will continue to stand with El Salvador, the Philippines and all people fighting against large-scale mining to strengthen our global front against OceanaGold. The International People’s Conference on Mining plans to file a case at the Permanent People’s Tribunal against Oceanagold to hold them accountable for the environmental damage and human rights violations they have committed. The people’s struggle in the Philippines and El Salvador against OceanaGold will not rest until OceanaGold has extricated itself from these countries.