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The International Centre for Settlement of Investment Disputes (ICSID), a World Trade Organization (WTO) court, ruled on October 14 on a lawsuit for $250 million brought by Pacific Rim against El Salvador for loss of potential profits after their petition for a gold mining permit was denied. The favorable ruling is in part testimony to the tenacity of religious, community, and environmental groups in El Salvador, who insisted that water quality and people’s health are more important than corporate profits, and who garnered widespread international support for their cause.

People who attended the 2012 CRLN Annual Luncheon heard about these local efforts to ban metallic mining in El Salvador from Brother Domingo Solis, a representative of the National Roundtable on Metallic Mining. He also talked about the Pacific Rim lawsuit.

El Salvador denied Pacific Rim’s application for a mining permit in 2009, because it failed to meet regulatory requirements. Brother Domingo pointed to cases in which cyanide from current mining operations had contaminated local drinking water. The ICSID court found that Pacific Rim’s suit was without merit.

While this is good news at last for El Salvador, the case has dragged on for 7 years, during which the country has had to pay out $12 million in legal fees. “[This is] enough to pay for over 2 years of adult literacy classes for 140,000 people,” points out Alexis Stoumbelis of CISPES.

To understand the magnitude of the lawsuit’s potential threat for El Salvador during those 7 years, $250 million represented over one-third of its annual national expenses in 2009. Losing the lawsuit could have crippled the government. In the face of that kind of pressure, the Salvadoran administrations of Mauricio Funes and Salvador Sanchez Ceren are to be commended for not caving in to Pacific Rim and for continuing to respect the majority of the Salvadoran people’s desire to ban mining in the country to protect their scarce water resources. CRLN applauds the courage of the Salvadoran people in continuing to advocate for a ban on metallic mining in the face of conflicts fomented by Pacific Rim that led to threats, attacks and the assassination of four people.

Pacific Rim is just one of many corporations who have used lawsuits filed with ICSID to blackmail cash-strapped countries into granting mining permits, and they have used provisions written into international trade agreements, such as the Central American Free Trade Agreeement (CAFTA) to do so. The fact that companies that do not even have licenses to mine yet can file lawsuits claiming potential loss of profit is one of the many reasons CRLN has consistently opposed CAFTA-style trade agreements, like the Trans-Pacific Partnership (TPP).

CRLN continues to be a leader in Chicago in the struggle to defeat the TPP. Follow us on facebook and sign up for our biweekly E-Digest to get updates on the work to stop CAFTA style trade agreements like the TPP.

Claudia Lucero

Claudia Lucero has blogged 1510 posts