The long struggle against mining corporations in El Salvador.

By: P. Cabezas

The ruling of the Pacific Rim(OceanaGold) Vs El Salvador case should be made public any minute now and many around the world are paying attention and getting ready to react depending on the outcome. Beyond a simple ruling that derives economic benefit for a winning party, this ruling will determine whether a corporation’s profit motive can override the will of a nation and its democratically elected government.


Anticipating the ruling, organizations members of the National Roundtable Against Metallic Mining in El Salvador and their International Allies are conducting formal and informal discussions about the most effective ways of responding to the ruling while many other individuals and organizations with interest in El Salvador are getting ready to take action as the information emerges. What we know for now is that the panel that adjudicated the case at the International Centre for the Settlement of Investment Disputes – ICSID, has issued a resolution and it is just a matter of waiting for its translation into Spanish to be made public, possibly in the last week of August.     

Fundamentally, the decision can go one of two ways: either the tribunal rules in favor of El Salvador, or it rules in favor of the company. However, a variety of mixed decisions could also stem from these two basic outcomes. One possible variation could be that El Salvador is found guilty of breaking its own laws and  is required to compensate the company. A second variation could be that El Salvador is found guilty of breaking its own laws but  is not required to pay the company. A third variation could be that El Salvador is found not guilty but is required to shoulder the legal cost of litigation. The best possible scenario is that El Salvador is found not guilty and the tribunal orders all legal costs of litigation to be paid for by the company.

Regardless of the outcome, we can expect that the legal battle will be prolonged by at least one more round of litigation; either to determine damages, to determine responsibility for legal cost, or to ask for an annulment.  Luis Parada, the lawyer leading the defense team, stated at recent public meeting in San Salvador that the Salvadorean government  is prepared to continue litigation and it is ready to file for an annulment shall the ruling favor the company.  “The tribunal failed to consider key information when making the decision on jurisdiction and new information has emerged that confirms that Pacific Rim executives lied to the tribunal; that should give us enough ground for an annulment” he stated.

Who makes corporations accountable? 

This decision represents a defining moment in the long struggle to defend El Salvador’s sovereignty from mining corporations. Since the 2000s, mining affected communities in El Salvador have demanded their legislative assembly to begin discussions on a law that permanently prohibits metal mining as they struggle to cope with the negative legacy of past mining practices and the potential impacts of modern industrial open pit mining. Poorly advised economic policy, implemented by the government of Francisco Flores in 2002, allowed mining corporations to set foot in the country and they have since threatened to inflict further environmental damage to a country already in a precarious ecological balance.  

Risks from the mining industry are not confined to within El Salvador’s borders, as the possible contamination from more than 30 mining concessions along the borders with Honduras and Guatemala threatens to pollute the most important watersheds in the country. The headwaters of El Salvador’s largest rivers—the Lempa, Sumpul, Goascoran and Torola—are located in Honduras and Guatemala and travel through the mountains to El Salvador. 


The most advanced project, Goldcorp’s Cerro Blanco, located in the in the department of Jutiapa, Guatemala, has already threatened to contaminate the Lempa river which provides water for over 60% of the population of the capital city of San Salvador.  The project was scheduled to begin exploitation in 2013, but was suspended due to technical difficulties. With Goldcorp´s current intention to sell the project it in the international market, it remains an immediate threat.       

Locally, families in the community of San Sebastian, in the department of la Union are still struggling to hold Milwaukee-based Commerce Group accountable for an acid drainage spill caused during and after the operation of a gold mine that was abandoned in 2006.  When the government revoked its operating license and asked the company to devise a cleanup plan, the company responded by suing the people of El Salvador for $100 million dollars, first under local courts and later under the ICSID.  In 2012, an ICSID panel ruled that company could not opt to sue under its rules unless it waived litigation in local Salvadoran courts. Later that year the Administrative Law Chamber of the Supreme Court of El Salvador ruled that the company was liable for the pollution in San Sebastian and that it should abide by the request made by the Ministry of the Environment to clean up the zone.  In 2016, a report issued by the Office for the Defense of Human Rights in El Salvador found that the government was guilty of  negligence for failing to protect the residents of San Sebastian and issued binding recommendations that it take immediate action to remediate environmental damage, to provide access to clean water to the community, to pursue legal action against the company and to review laws and international treaties to better regulate irresponsible conduct from corporations.                  

In the region Chalatenango, organized communities have fought the presence of Canadian-based corporations Pacific Rim (now OceanaGold) which still maintains an exploration license at Cerro Petancol in the town of Potonico, and Au Martinique, which owns licenses to explore three concessions within the historical Eramon mountains.  Work on these projects was effectively stopped by local organizations through mobilizing the community, building national alliances, and implementing creative strategies to defend their territories in 2005. In light of the failure of the national government to implement a national prohibition on mining, these communities started to implement binding municipal referenda in 2014 to determine whether mining should take place in their territories.  So far, four municipalities have banned mining through local municipal ordinances and others affected by these projects are determined to continue holding referenda until the national Legislative Assembly prohibits mining. 

In Cabañas, the presence of Canadian-Australian Company OceanaGold (formerly Pacific Rim) resembles the ghostly image of a folk tale; everyone has heard about it, but try finding evidence of its material existence in El Salvador and it is nowhere to be found.  Instead the influence of the company is felt through its surrogates Minerales Torogoz and Fundacion El Dorado, both of whom are frantically trying to sanitize the legacy of violence and trauma left by their predecessor Pacific Rim. But communities can see through the corporation’s intentions and are campaigning to denounce its deliberate strategy to generate local political support for the eventual opening of the El Dorado project. They particularly deplore the use of proxies to promote a narrative of green corporate social responsibility, supporting community development initiatives, and financing local politicians.

The presence of Pacific Rim in the territory was named by the Human Rights Office in El Salvador and the deputy chief of police as the main cause of local community conflict that left four environmentalists murdered and many others injured, and deep local community divisions. When organized communities demanded justice for the families of the murdered environmentalists and an expulsion of the company out of their territories, the company was forced to sell, but not without first launching a nefarious law suit against the people of El Salvador.  


The upcoming resolution of this law suit has reminded the communities of Cabañas and all the people of El Salvador that their fight to defend the sovereignty of the country from lurking mining corporations is far from over.  Even with a positive outcome for El Salvador, we can expect that the people’s fight to hold corporations accountable for their actions will be intensified, not only at the national level where they will once again demand legislation against an industry that threatens the survival of the nation, but also at the international level where they continue to build alliances to challenge a stacked international investment regime that favours corporate rights over human rights.

The stakes are high, this decision will set a precedent for the respect or potential erosion of democratic rights everywhere.

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