Lambert here: Even if Pacific Rim were the most public-spirited of global corporations, a fluffy lamb among the wolves, and even if El Salvador were, oh, notoriously crooked, corrupt, and infested with fraudsters at every level of government, surely Americans across the political spectrum would take issue with a lawsuit between the two being decided by an undemocratic, unaccountable, and secret “autonomous international institution”? What if it’s us, next?
By Robin Broad, a Professor of International Development at the School of International Service, American University, Washington, D.C., and John Cavanagh, Director of the Institute for Policy Studies. Originally published at Triple Crisis.
On September 15, in a tribunal that few know exists, the fate of millions of people and hundreds of millions of dollars will be debated and decided in the next six months.
The tribunal is the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID). It sits in downtown Washington, D.C., behind security guards at the World Bank. At issue is the future of El Salvador, some 2,000 miles away, where a global mining company—Pacific Rim, now owned by Australian/Canadian corporation OceanaGold—wants to mine gold in ways that could well poison the river system serving over half the Salvadoran population.
The crime alleged by the mining company is that the government of El Salvador has not approved a mining license for it. But the real crime is that a foreign corporation is trying to stifle democracy in a country where a small landed oligarchy and U.S. intervention stifled it for so long.
We have just returned from El Salvador, from the small towns in the north where Pacific Rim started to dig exploration wells about a decade ago as gold prices began a steep rise. The farmers in this area, many originally well-disposed to the prospect of jobs in mining, became concerned as springs and other water sources dried up during Pacific Rim’s explorations. This prompted local people to visit mines in nearby Honduras. There, they saw polluted rivers and skin diseases, and heard of the social conflicts between those working in the mines and those suffering nearby. They discovered the poisonous nature of the cyanide used to separate the gold from the surrounding rock. And they learned the cyanide would release not only gold from the rock but also toxic arsenic.
The more they learned, the more many Salvadorans became concerned about these poisonous byproducts entering the watershed of the Rio Lempa, the huge river that is the lifeblood of this small nation.
And so, “yes to life and no to mining” became their rallying cry. Many in the area refused to sell their land to Pacific Rim, one of the requirements to get a mining license in El Salvador. And, as Pacific Rim campaigned to gain support, the conflict over mining deepened. According to the office of the government’s Ombudsman for Human Rights, at least five anti-mining activists were assassinated as a result of the conflict. Many more received chilling threats.
But still the opposition to gold mining grew into a strong national movement, the National Roundtable Against Metallic Mining (La Mesa). And, in an act of democratic accountability, the government listened to the majority wishes of its people and refused to approve the corporation’s inadequate environmental impact assessment. Indeed, three successive elected presidents of El Salvador—from conservative and progressive parties alike—have refused to issue any new gold mining permits.
That should have been enough to keep gold mining out of El Salvador. Yet the saga continues. Because of trade and investment laws and agreements that the United States has championed in recent decades, corporations that feel their future profits are being threatened by government actions can actually sue the governments.
Corporations typically bring such “investor-state dispute” cases to this little-known but extremely powerful tribunal in Washington—ICSID. In this case, Pacific Rim/OceanaGold sued the Salvadoran government for over $300 million even though the company never had an actual license to mine.
The “merit stage” of the hearings begins on September 15, 2014. It will be held in secret, without those whose lives will be determined by the ruling able even to listen to the proceedings. Three arbitrators will sit in judgment without clear rules on what kind of evidence they need consider or what legal precedents they must weigh. And, if either side disagrees with their ruling, there is no appeal allowed based on the legal merits.
Is this any way to decide the future of a country, its ecosystems, and its people? Indeed, this World Bank’s tribunal is being accused even by some insiders as biased in favor of corporations. “The system is broken,” announced a prominent lawyer who argues before ICSID panels, George Kahale III. Kahale went on to denounce the investment agreements that have empowered hundreds of corporations to pursue these ICSID cases as “weapons of legal destruction.”
The Pacific Rim v. Republic of El Salvador case demonstrates what is so wrong with similar investor-state clauses in new trade agreements that the Obama administration is negotiating with nations in the Pacific and in Europe. No country or its citizens deserve a future where key policies are decided by unaccountable arbitrators in a secret tribunal where neither democracy nor the environment appears to carry much—if any—weight.
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Picking which treaty to enforce is an American staple and goes back to the founding of the nation. The ones they don’t like, they ignore. The ones they like, where corporate USA has an interest, they are all in. No expense is spared to get their way.
Folks should read the article at Truth-out, “US Slammed for Failure to Fulfill Legal Obligation to Eliminate All Forms of Race Discrimination,” by Marjoe Cohn. She briefly discusses the UN’s scathing report on the US government totally ignoring its treaty obligations on racism.
When corporate interest are at stake count on the US to ignore the treaty. (The Copenhagen Treaty comes to mind…..)
Ask a Native American about the US gov’t and treaty obligations…
This could get very ugly very quickly. The El Salvador government can legitimately claim that the corporations officers are terrorists and, using precedents set by America, have those corporate officers “liquidated.” This action can be carried out anywhere in the world. America does it. Why not everyone else?
As for American Marines landing and “pacifying” El Salvador; it’s been done before in that region numerous times. Gunboat diplomacy just morphs into gunship diplomacy. ICSID is just a fig leaf under which we hide the organ of the state that compels.
Thank you for exposing this tribunal! Most likely it was conceived and implemented before there was an internet and bloggers.
We’re experiencing the same type of discrimination here in the states with NG fracking, but it doesn’t sound like it rises to the same level, although potentially. I don’t suppose it matters to those whose wells have been polluted, whether it was mining or fracking.
agree the stage has long been set. ive always kept an eye this one:
ConocoPhillips: Arbitration court rules Venezuela seizure unlawful
“In the early 1990s, ConocoPhillips helped develop the Petrozuata and Hamaca projects in the Orinoco heavy-crude belt, and the offshore Corocoro project in Venezuela with “substantial long-term investments,” the company said.
Venezuela’s then President Hugo Chavez forced multinational oil producers to form joint ventures ***as minority partners***. ConocoPhillips took an impairment of about $4.5 billion in 2007 related to the case, analysts at Simmons & Co. said.
“We welcome this decision by the Tribunal,” Janet Langford Kelly, senior vice president, legal, general counsel and corporate secretary at ConocoPhillips, said in a statement. “This ruling sends a clear message that countries cannot expropriate their investments without fair compensation.”
The case is not closed: the arbitration process will continue in order to determine how much is owed to ConocoPhillips, the company said.” (MarketWatch)
“Regardless of the overall state of the economy, there is now a large enough elite made up of new multi-millionaires and billionaires for Wall Street to see the group as “superconsumers,” able to carry consumer demand all on their own.”
Klein, The Shock Doctrine: The Rise of Disaster Capitalism
Hmmm, I wonder if ISIS know about this. Maybe they could raise a case against America for its interference with the ISIS Business Plan and pending IPO?
Perhaps ISIS should incorporate, and then claim that the laws against terrorism and murder unfairly burden their corporation’s religious freedom.
ICSID is a forerunner to the ‘investor-state dispute settlement’ (ISDS) courts of arbitration within the Transatlantic Trade and Investment Partnership (TTIP) agreements presently being negotiated, wherein investor protection trumps sovereign, civil, labor and environmental rights.
Similar as with the Trans-Pacific Partnership (TPP), I do believe though my knowledge is lesser on that one.
One also wonders whether this is another reason to engage in corporate inversions – I doubt domestic corporations have the right to avail themselves of the ICSID tribunals. A foreign corporation, however…
We managed to ban cyanide heap-leach mining here in MT, through the citizen initiative process, some years ago. Of course, we pulled that upset off mainly because, at the time, corporations were not allowed to spend from the corporate checkbook on initiative campaigns–before our idiotic supreme court overturned that law.
We got plenty of flack from industry during that campaign, even though they weren’t allowed to spend money directly against us. Fortunately, we didn’t have any of our organizers murdered. Here’s hoping the El Salvadorans are successful in stopping this catastrophe waiting to happen–whatever the kangaroo court decides.
i’ve lived in a city in mexico where this type of mining occurs and the devastation is tremendous. i thought, “why don’t the mexicans take better care?”.
then i found out the mining company was canadian.
Welcome to the wonderful world of Neo-Feudalism.
As in feudal times, those who control the use of force make all the rules, which the fools (us) must obey.
Absolute monarchy (representing inherited aristocracy) implemented the Star Chambers where they acted as judge, jury & prosecutor – all in secrecy.
There is only one answer to such despotism – REVOLUTION.
Bollocks. Armchair sloganeers intoxicated with dreams of ALL CAPS blood give me a pain. The history of the 20th Century in China, Russia, German, Italy, and Spain, not to mention Indonesia and Cambodia, shows the real outcomes of these dreams. It’s always possible to make things worse, and squander millions of lives into the bargain.
We haven’t even seen strategic non-violence practiced at the level and discipline of the Civil Rights movement, and already we prate of grandiose visions. What crap.
“The dominant element in our financial oligarchy is the investment banker. Associated banks, trust companies and life insurance companies are his tools. Controlled railroads, public service and industrial corporations are his subjects. Though properly but middlemen, these bankers bestride as masters America’s business world, so that practically no large enterprise can be undertaken successfully without their participation or approval. These bankers are, of course, able men possessed of large fortunes; but the most potent factor in their control of business is not the possession of extraordinary ability or huge wealth. The key to their power is Combination–concentration intensive and comprehensive–advancing on three distinct lines:”
More: http://www.law.louisville.edu/library/collections/brandeis/node/191
Though the above was written a century ago in a book by Brandis when our nation was beginning to understand the need for regulation of markets it still published and relevant today.
another big boy toy…was thinking of suggesting to some athens lawyers that it be used against germany by greeks who were never paid their 40 basis points on the multi billion dollar annuities that the BIS was the trustee for (since the early 30’s) from WW one…then noticed the filing fee…a very prole-ish 25K americano greenbux…but then i read some yalee professor write the BIS had never distributed the payments (even the itsy bitsy 4 percent of payments actually made by those AAA germans) and had actually given them “back” to the german railroad system…as IOU’s (not described as to specifically what type of paper was issued)…and that “BEFORE” the london agreements of 1953-54, the BIS had already chosen to burn the IOU’s in 1948…
can i become a german and never pay my debts too…???
please please can I can I, please…
maybe argentina can figure out how many more times it has to rip off foreign investors like germany did to get its very own S&P AAA rating too…
the only thing that I am confused about on these media played out stories is the notion the arbitrations are being hoisted onto countries because of some treaty agreements…in most of the cases that have gotten media attention, it is my understanding the actual governments or former governments…(unlike most, the USA is one of the few static election republics with only two parties jockeying for power) signed the agreements and allowed the clauses to be placed in the agreements and signed them…so it is not some “shock” to the governments that they are being dragged into an arbitration…
BUT… the idea that Governments do not know how gold is processed…hmmmm…last time I checked, most mining is being carried out in much the same way it has been for the last 50 years….nothing new or monsantoish about these mining techniques…
http://www.huffingtonpost.ca/2013/10/03/quebec-fracking-ban-lawsuit_n_4038173.html
under the st. lawrence river..
People this is all about economics, that have précised for the past 40 plus years. Which says the market know best and free trade produces economic growth. What Lambert points out is the just the newest wish list. Which is a consolidation of corporations which are control by a few elites who are trying to eliminate any control of there behavior by governments. This behavior was corrected already once starting with TR and finishing FDR’s administration. But let loose again by free trade theories of Milton Friedman. Today is even worse as it wishes to eliminate even any future laws that might effect their bottom line, regardless of the consequences to the people or environment.
For anyone who doubts we have not been here before read: http://www.law.louisville.edu/library/collections/brandeis/node/191