Decriminalization and the Impact of Drug Trafficking in Central America

Decriminalization, or legalization, of drugs in Central America is a hot topic in El Salvador and Guatemala right now. Last Friday, Inside Story Americas, an Al-Jazeera news program, ran a program on the effects of drug trafficking on Central America, touching on the pros/cons of decriminalization.

The program was in response to comments made last week by Guatemalan President Otto Perez Molina, who said he would be open to decriminalizing drugs in an effort to address Guatemala’s security issues. The comments came after a meeting with Salvadoran President Mauricio Funes who also said he is also open to the idea. President Funes stated,

“Our government is open to discussion on any proposal or measure which achieves a reduction in the high levels of consumption in our countries, but particularly (to reduce) the production and trafficking of drugs. As long as the United States does not make any effort to reduce the high levels of (narcotics) consumption, there’s very little we can do in our countries to fight against the cartels, and try to block the production and trade in drugs.”

After returning to El Salvador from his meeting with President Perez Molina, President Funes backtracked a bit, saying that he does not favor decriminalizing drugs.

Saving the discussion about the pros and cons of decriminalization or legalization for another blog post, an interesting point of these recent conversations is the growing emphasis on the failure of the U.S. to curb its demand for drugs. Al Jazeera cited a recent government report that found that 22.6 million Americans used illicit drugs in 2010, nearly 9% of the population. While the number of users dropped from 2.4 million in 2006 to 1.5 million in 2010, the U.S. remains the largest consumer of cocaine in the world.

The Inside Story panelists said the heads of state in Central America, and even Mexico and Colombia who have talked about decriminalization, may be discussing decriminalization in order to pressure the U.S. into taking more actions to decrease demand. Experts from around the world agree that the “war on drugs,” as it has been fought over the past 40 years, has failed. Even President Obama has acknowledged that the U.S. needs to address the demand issue, and treat the issue as a public health problem.

U.S. policies have yet to change, though. In 2011, the National Drug Control Strategy had a budget of $15.5 billion, and the expenditures were roughly the same as in previous years. Approximately 1/3 ($5.6 billion) of the federal budget for the war on drugs was allocated for treatment and prevention – an increase of $0.2 billion from the 2010 budget. The remaining $9.9 billion was allocated for law enforcement, interdiction, and international support, the same as previous years.

In addition to the well-documented affects on Mexico and South America, the U.S. demand for illicit drugs produced in South America and trafficked through Central America and Mexico have very real consequences in Salvadoran communities.

El Salvador, Honduras, and Guatemala now comprise the most violent region in the world. While police officials blame 90% of the murders on local youth gangs, other government agencies, recently demoted police officials, and civil society organizations believe the violence is the result of international organized criminals who are trafficking drugs, guns, people, and laundering money. They estimate that only 10-20% of El Salvador’s murders are attributable to local gangs. The high murder rates have resulted in such insecurity in El Salvador that the U.S. aid program, Partnership for Growth, indentified it as one of the country’s two primary barriers to economic growth.

Traffickers use border communities, coastal villages, and other regions to move shipments from South American producers to North American markets. But they don’t just use these communities quietly – they often take them over, corrupting local government and police officials, making sure that local citizens and law enforcement do not interfere with their activities.

Along the coast, traffickers use small villages, ports and tourist destinations to refuel the small boats they use to transport drug shipments by sea. They also use these villages to transfer shipments that arrive by boat to cars and trucks, which then continue the journey north via land routes. Traffickers use communities along El Salvador’s borders with Honduras and Guatemala to move shipments without interference from border agents.

The cartels control these towns by putting local government and police officials on their payrolls. In turn these officials arrange for locals to move and provide security for shipments, and make sure that law enforcement agencies do not interfere. The local government and police officials maintain a culture of lawlessness that prevents political opposition and limits civil society.

One of the best examples of how traffickers work in El Salvador is the Texis Cartel, which was exposed in a report put together by El Faro in May 2011 and a companion video produced by the Washington Office on Latin America. The Texis Cartel ran a land route that trafficked drugs and other contraband from Honduras through northern El Salvador and on to Guatemala.

While it remains unclear how decriminalization or legalization would affect Central American communities, experts and even President Obama agree that the long-term solution must include a decrease demand in the U.S. Unfortunately, U.S. officials have yet to shift their priorities, forcing Central and South American governments to discuss other options. And until the U.S. can kick its cocaine problem, the violence will continue and the cartels will continue to control communities throughout the Americas.

Flood Update – Tuesday

Sorry that we’ve been slow with an update this morning, but we didn’t receive much information out of the Lower Lempa until a moment ago.

Some good news to report; the communities of Nueva Esperanza, Ciudad Romero, Zamorano and others that are completely underwater have been completely evacuated. We have been worried about a group of 57 people (last night we reported 40, but that number was revised upward this morning) were stuck on the top of the Nueva Esperanza Community center and then the bell tower of the church last night. We just received word that they reached the emergency shelter at about noon today.

The water has also begun to recede a bit. While the road is still flooded in some places it is possible to get large trucks all the way down to La Canoa, which has been cut off for the past couple of days. Our staff also met up with several people from the shelter in Amando Lopez who made their way up to the main road and rode their bicycles through the flood waters all the way up to San Marcos.

The shelters are full in San Marcos, Tierra Blanca, Angela Montano, and Jiquilisco, and the conditions are poor, but our staff reports that supplies are starting to arrive.

The weather is supposed to be clearing up today, though our staff reports that it is still raining in the Lempa. Officials from Civil Protection have warned the general public that even if the weather is nice today, the forecast is for storms tomorrow and possibly Thursday so no one should let their guard down.

The latest reports are that there are 32 confirmed deaths in El Salvador, and two people are reported as missing. Schools and universities remain closed today and probably tomorrow. El Faro.net is reporting that the official number of evacuees remains at 32,000, and that over 20,000 houses have been destroyed.

The King of Spain has sent a Boeing 727 full of relief supplies to El Salvador, and it is currently sitting at the military airport in Comalapa being unloaded.

Though the news today is not as bad as yesterday, there are many, many concerns about what’s ahead. Eduardo Espinoza, the Vice-Minister of Public Health, is warning that the greatest threat to public health at this moment is contaminated well water. He is very concerned that in rural communities contaminated water will result in high rates of gastrointestinal infections, typhoid fever, hepatitis, and other diseases. The populations most affected by these diseases are the ones living in shelters and have little or no access to medical care. The ministry is working to get doctors and public health experts to the shelters.

Before the rains started last week, the government was predicting record harvests of basic grains like corn and beans. One estimate is that 80% of the nation’s agricultural crops are lost – which will devastate the local economy and food security. The Consumer Defense agency, a private advocacy and watchdog group in El Salvador, is monitoring the prices of foods and other products, especially imports, and so far there has not been a rise in food prices, but it is a real fear in the coming days and weeks.

The Voices staff is currently drafting a couple posts on different aspects of this disaster, and we’ll have a slideshow and update from the Lower Lempa later this afternoon.

US Embassy Announces Aid for Flood Relief

Today the U.S. Embassy in San Salvador announced an aid package worth $50,000 to support the Salvadoran Ministry of Civil Protection’s efforts to respond to the worst flooding in the country’s modern history. The package will help buy “fuel for emergency vehicles, as well as portable kitchen sets and hygiene kits for people staying in government shelters.”

The Embassy statement also says that they are “distributing equipment that was previously donated to the government of El Salvador by USAID in anticipation of this type of emergency.” The equipment includes plastic sheeting, 2800 hygiene kits, shovels, and other tools.

In a similar announcement, La Prensa Grafica is reporting this evening that the International Development Bank is releasing the first $25 million of a $50 million loan package. President Funes tonight said that the funds will be used for recovering from the disaster. The La Prensa Grafica article also reports that the governments of Spain, Taiwan, Guatemala and the United States have offered assistances, as has the Central American Bank of Economic Integration and the United Nations Development Program, but it is unclear whether any support has actually to reach those in shelters.

President Funes tonight also confirmed that there are 32 confirmed deaths in El Salvador, and that 3 other people are reported as missing, and 32,000 are evacuated to emergency shelters.

Another article in La Prensa Grafica reports that the Legislative Assembly today voted unanimously to declare a national emergency for the next 60 days. In part that waives all duties on aid coming into the country from aid organizations.

While the US Embassy’s contribution is a nice start, the international community seems a little slow to respond. The flooding, at least in the Lower Lempa region of Usulután, has reached epic proportions. There are thousands of people in shelters with no food or water, and many others are still stuck in their communities.

Perhaps the lack of international aid is linked to the lack of coverage by the international media. The AP put out a story yesterday that was carried on the Huffington Post, and the blogs for a couple major news outlets. But a quick scan of some of the major news websites (NY Times, Washington Post, CNN, BBC, NPR, Al-Jazeera English) found not one story on the flooding in Central America; forget about a story focusing on El Salvador. Maybe that will change with tomorrow’s news cycle.

This apparent lack of attention makes your contribution and support all the more important. Please help us in two ways:

1) Click on the Donate Now button and make a financial contribution to flood relief – we’ll make sure it gets directly to the community; and

2) inform others about the devastation and ask them to make a contribution.

We’ll be providing another update tomorrow morning.

 

Sonia Sotomayor Visits El Salvador

Yesterday, August 15th, Associate Justice of the Supreme Court, Sonia Sotomayor arrived in El Salvador for a week-long visit. Justice Sotomayor is visiting her close friend, Mari Carmen Aponte who is the U.S. Ambassador to El Salvador. During her stay, Justice Sotomayor will meet with Magistrates on the Salvadoran Supreme Court, as well as law students in San Salvador. She also plans to meet with students from Supérate, an youth program that seeks to improve opportunities for youth to develop their professional lives.

 

Justice Sotomayor and Ambassador Aponte, both Latinas with very successful legal careers, serve together on the board of the Puerto Rican Legal Defense Fund. The two have been so close that Justice Sotomayor swore in Aponte as Ambassador in 2010.

 

The visit comes less than a month after the resolution of the constitutional crisis that began on June 3rd when the Legislative Assembly and Executive branches tried to impede on the judicial independence of El Salvador’s Constitutional Court. This seems less of an official visit in response to that crisis, than two old friends getting together.

Sotomayor and Aponte in El Salvador

The Cost of Free Trade: 5 Years into DR-CAFTA

The Dominican Republic-Central American Free Trade Agreement (or DR-CAFTA) went into effect March 1, 2006. After 5 years, it is time to evaluate what kind of results this agreement has produced. Like any other free trade agreement, the logic behind CAFTA was that liberalized trade leads to a net welfare gain for both countries. Furthermore, because the seven countries involved in the agreement (US, Dominican Republic, Honduras, El Salvador, Costa Rica, Guatemala, and Nicaragua) have different resources, technologies, and preferences, there are gains to be made from trade. By pursuing each other’s comparative advantage, as David Ricardo first argued, each country may specialize in that which it is relatively better at producing. This is a powerful theory, but as economics often shows, theory cannot always be reconciled with reality; many of these models make specific assumptions that do not always match the real world. Specifically in the case of CAFTA, it appears as though the Central American countries have suffered several negative consequences of this free trade agreement. The results of the agreement that weren’t clearly negative are ambiguous at best.

 

The removal of tariffs lowers the costs of trade between these countries and their main trading partner–the US. That being said, because tariffs have been removed, the governments of the Central American countries have less government revenue flowing in. While the US hardly had any tariffs on imported goods from Central American countries, the Central American nations had high tariffs on US goods in order to raise revenue for their governments. Before DR-CAFTA came into effect, about 80% of all US goods were not duty free, and the removal of the tariffs caused the governments to lose a substantial amount of revenue.

 

Additionally, because the US subsidizes its agricultural products, it has hurt the average farmers in these Central American countries. Since most Central American farmers cannot compete with the massive, more efficient farms in the US that are subsidized by the government, many of these Central American farmers find themselves out of business.  This forces them to instead try to find work in the multi-national corporations’ factories. More individuals in the cities seeking jobs in the so-called “maquilas” means that the supply of labor rises while the number of maquilas stays the same. This leads to an excess supply of Salvadorans seeking jobs in these factories. Thus, factory owners may lower their salaries because there is so much competition for work.

 

Many theorists would assert that one of the largest benefits of trade is that after lifting barriers to trade, the countries involved in the agreement will be able to consume more, leaving them all better off. In reality however, the results are neither negative nor positive, but rather unclear. Data shows that over the course of the last five years and until 2010, exports and imports in El Salvador have steadily increased. One, however, cannot say for certain that this is a direct result of DR-CAFTA. More than that, while Salvadoran exports and imports may have increased, it does not necessarily mean that El Salvador is physically producing and exporting more goods. Export and import data are calculated by value, and therefore one must factor prices into the equation. It is possible that El Salvador produced just as much last year as it did five years ago. However, because prices have risen, the value of its exports has also risen even though El Salvador is not better off in real terms. There is some evidence that suggests that increases in price levels over time account for some of the rise in exports. According to the data, El Salvador has experienced inflation since 2005. Because of the difficulty of directly attributing rises in exports and imports to DR-CAFTA the actual effect of the agreement on trade is ambiguous.

 

The effects of DR-CAFTA remain unclear when analyzing Chapter 10 of the agreement, which eliminates barriers to investment. According to the chapter, investments are very strongly protected.  This protection is provided by the most-favored nation provision (in which the countries agree to accord one another with the same favorable terms that would be offered in treaties with any other nation) the “fair and equitable treatment” clause (which refers to a country agreeing to treat foreign investors the same as domestic ones), and the “full protection and security” clause (which refers to a country’s agreement to protect one other’s investors by providing them with security).  Because of these provisions, multi-national corporations can securely conduct their business in signatory nations and employ their citizens.  Although this is positive for El Salvador and the rest of Central America, the nature of the jobs these corporations often provide is unsanitary, unsafe, and low-paying. Thus, the citizens of Central America are not necessarily better off, especially since the multi-national corporations often do not reinvest their profits within the region but instead send it back to their home country. Due to the lack of economic development from the international investors, workers do not necessarily stand to gain.

 

For all of these reasons, DR-CAFTA has no clear and significant benefits to El Salvador and the other Central American members of the agreement. Salvadorans and other Central Americans need development, and because DR-CAFTA seems to facilitate it through spurring investment, but impede it through working conditions, among other things, this trade agreement is neither a sufficient nor an ideal solution to development.  DR-CAFTA, along with its effects like poor working conditions, low salaries, US subsidized exports, etc, will continue to remain an issue of concern until further investigation and/or reforms can be completed.

OAS Meeting is the Latest Regional Effort to Combat Organized Crime in Central America

The Organization of American States is currently holding its 41st General Assembly in San Salvador, the theme of which is “Citizen Security in the Americas.” The agenda includes discussions on combating organized crime.  These discussions will include consideration of a draft proposal for fighting transnational crime, drawn up by El Salvador.  The Secretary General Miguel Insulza said that he expects “concrete results, because [they] are not going to confront the topic of transnational organized crime in [Latin America] with declarations alone.” This meeting will set the perimeters for an action plan that will be finalized for the November meeting in the Dominican Republic.

The OAS General Assembly in San Salvador

The OAS is not the only group to discuss the growing lack of citizen security and the problem of organized crime.  A recent meeting in Managua, Nicaragua of the presidents of El Salvador, Guatemala, Honduras, Nicaragua and Panama produced a new level of regional ownership of Central American organized crime.  The presidents met to affirm their commitments to collaboration in the fight against drug trafficking and trans-national crime.  Additionally, they recognized each nation’s respective weakness in the face of increasingly well-organized and -funded criminal syndicates.  Unfortunately, no specific actions were planned, but the budding cooperation between the countries is a positive step towards promoting greater security.

The United States Has pledged support and acknowledged that citizen security in the region is a “shared responsibility,” through the Central American Regional Security Initiative (CARSI). The State Department describes CARSO as an initiative to achieve five goals in Central America: 1) Create safe streets for the citizens of the region; 2) Disrupt the movement of criminals and contraband within and between the nations of Central America; 3) Support the development of strong, capable and accountable Central American governments; 4) Re-establish effective state presence and security in communities at risk; and 5) Foster enhanced levels of security and rule of law coordination and cooperation between the nations of the region.

Focusing on counternarcotics efforts (drug trafficking is at the center of organized crime), the U.S. spent $260 million on the CARSI initiative alone during 2008-2010 and President Obama pledged another $200 million during his meetings with Funes in March 2011.  Beyond financial support, several U.S. agencies are on the ground in El Salvador, including the FBI, the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Drug Enforcement Agency (DEA), and USAID, all of which are partnering with Salvadoran ministries to fight organized crime.  The DEA, through their Drug Flow Attack Strategy, aim to intercept drug trafficking.  DEA agents recently played an instrumental role in a gun trafficking bust and confiscated 28 tons of ethyl phenyl acetate, a chemical used to make crystal meth.  The U.S. Military works in the region to combat drugs as well, coordinating their activities from the Soto Cano Air Base in Honduras.

In April of 2011, Panama inaugurated the Central American Integration System’s Operative Center for Regional Security (COSR-SICA), intended to be a cooperative center for the coordinated fight against organized crime.  It’s a network through which Central American agencies can share information and technology on drug trafficking, organized crime, human smuggling, gang activity, and other security threats.  It will also receive logistical support from a similar information-sharing center in Key West, Florida, where 31 U.S. agencies operate.  Each Central American nation will be sending experts to work in the Center to organize the coordinated efforts for citizen security.

The recent creation of cooperative bodies to ensure citizen security in Central America, and the increased focus on the issue by existing organizations is an indication of the growing threat that organized crime poses to individual security.  The highest levels of government are finally talking about organized crime, and that is a good first step.  But it will be important for the citizens of each of these countries to continue applying pressure so that the discussions grow into concrete actions.

Former Salvadoran General Faces Deportation from the US

General Eugenio Vides Casanova currently has been living as a legal resident in South Florida since 1989.  He moved to the United States after retiring honorably from his post as El Salvador’s minister of defense, a position he held for 6 years during El Salvador’s brutal civil war.  During this time, he was a close ally of the United States because of his intense efforts against the Marxist guerillas.

In a case that the New York Times calls “an about-face in American policy,” General Vides is now facing possible deportation following being charged with torture in a U.S. immigration court.   This is the first time the Department of Homeland Security has pursued immigration charges against a high-ranking foreign military official.

Both the prosecution and defense are expected to call former U.S. ambassadors to testify: Robert E. White for the prosecution and Edwin G. Corr for the defense.  Another witness is Juan Romagoza Arce, a Salvadoran doctor who was tortured by the National Guard in 1980.

General Vides has already faced legal trouble in the U.S. for his actions during El Salvador’s civil war.  He, along with General José Guillermo García, was accused and acquitted by a Florida jury in 2000 in a civil case for the killing of four American churchwomen who were murdered by Vides’ Salvadoran National Guard.  The same year, the justice center filed charges of torture against the two generals.  In 2002, they were found guilty of torture by a Florida jury and ordered to pay $54.6 million to three torture victims, a decision that was upheld by an appeals court in 2006.

This case is an example of the lingering effects of El Salvador’s civil war, effects that can even be seen in the United States.  No American officials have been held accountable for their part in human rights abuses in El Salvador during the war.  Even though more than 400 people have been deported from the US since 2003 for rights abuses, this is an important effort to hold Salvadoran allies of the US responsible for their actions in a war that often slips under Americans’ radars.

Those who fought on the other side in the war, the FMLN guerillas, have been at odds with U.S. officials since the war, first for their communist/Marxist ideals and later for actions taken during the war.  For example, US diplomats still refuse to meet with El Salvador’s Public Security Minister Manuel Melgar.  He was a guerilla during the war who is accused of killing 4 US Marines in 1985.  In a July 2009 cable released by the WikiLeaks website, American diplomats described seeing his appointment as the imposition of FMLN hardliners, despite President Funes’ pretty moderate political stance.

The case against General Vides is an important step in acknowledging the human rights abuses by both sides during the civil war, including those who the US government strongly supported.  The trial is expected to last a week, so it should be decided by the end of April, which could set a significant precedent for finally responding to El Salvador’s dirty war.

Solidarity in El Salvador

Last month a joint delegation of students from a Stanford University Liberation Theology and Human Rights class and members from the South Bay Sanctuary Covenant, one of our U.S. partner organizations, travelled to El Salvador.  Upon her return to school, Erin Inman, one of the Stanford students, wrote the following article for her school’s newspaper about her experiences in El Salvador on the delegation trip.

 

Traffic looms on either side as police officers attempt to direct the crowd off the street, too large to be contained by the plaza. Spanish words buzz past my ears at speeds too fast to comprehend, so instead, I focus on retrieving my bagged dinner and candle for the vigil.

Just before 6 p.m., the chaotic crowd transforms into three orderly lines drawing people down San Salvador’s main avenue. The march in honor of El Salvador’s martyr and unofficial saint, Oscar Romero, has begun.

People of all sorts flow past me in the sea of celebration: Salvadorian youth energized for a man of another time, Salvadorian elders who remember their hero with pride, international students and workers affected by the legacy of Romero and us, a group of 20 Americans attempting to build solidarity with the Salvadorian nation.

As participants and professors of the winter quarter class, El Salvador: Liberation Theology and Human Rights, we were joined by members of South Bay Sanctuary Covenant (SBSC), a local religious group committed to creating social justice in Latin America, for a week of confronting the past and present realities of El Salvador.

Throughout the week, we met with social activists about the evolving tension and violence in the Cabañas province due to mining and environmental issues. We heard from a variety of voices detailing El Salvador’s current drug, gang, female inequality and immigration problems. Though 19 years have passed since the end of its civil war, many of the issues prompting it remain unresolved.

At the chapel where Monseñor Romero was assassinated, we stood with our hands on the altar, each offering a word of what the man, a conservative, Roman Catholic archbishop turned liberal voice for the oppressed, represented for us.

“Faith.” “Hope.” “Love.” “Justice.” Each word is said with conviction, as if a strong voice could will these words into being.

“The transformation of our people and our society is in our hands. Not in those of Obama nor those of Funes,” offers our guide, a Carmelite nun, in closing. “Rather, change is brought about through my hands and the small decisions I make each day in which I act with justice, peace and solidarity.”

After five days of meetings in San Salvador, interlaced with good food and good conversation, we packed up our mini bus for the two-hour drive out of the capital and into the rural countryside of the Lower Lempa. Every time the bus stopped along the shack-lined roads, we were met with a chorus of “Mango! Pan dulce!,” as sellers thrust food items towards us through the open bus windows.

When the bus pulled into Comunidad Octavio Ortiz, a partner community of South Bay Sanctuary Covenant, signs and general excitement welcomed us. After introductions, we jostled through a rendition of “Heads, Shoulders, Knees and Toes” for the children.

“You do realize this means we’ll never be able to run for public office,” a fellow Stanford student joked, upon realizing we were being taped.

Soon, as the energy dwindled down, I was following my host brother down the main road toward his home. We approached a house with two girls preparing dinner near the outside fire, a dog sleeping quietly beneath it. A quick peek into the house revealed hammocks as the only furniture, besides a table or two, upon which sat a stereo and a blaring television.

As the girls chopped vegetables, preparing a soup for dinner, I took in the scene around me. Laundry hung on multiple lines. A heavy duty truck stood alone on one side of the lot; firewood was stacked against the house, and a pile of freshly picked corn lay waiting to be husked, while four dogs, a cat and many chickens snuck in the house, only to be shooed out.

A dog approached me, and when I asked for its name, my host brother looked up from his work, smiled and said “Gringo,” the irony not lost on either of us.

The next two days passed in a blur of tortilla and jam making, sugar cane processing, soccer games, mishaps with outdoor showers and latrines, loud music waking us up at 5 a.m., a developing hatred for cockroaches and my own attempts to avoid butchering the Spanish language.

After living with my host family, meeting with the community board and partaking in the community’s Celebration of the Word, what speakers in San Salvador had alluded to became a reality for me: the Salvadorian people welcomed our solidarity. Young and old alike passed “La Paz” after service, and few of us were without a little girl climbing onto our laps or laying siege to our hands.

On the last night, at a concert celebrating Romero at the University of Central America, stood the very same segments of society from the march a week prior, only this time, our group was not interested in building solidarity. Instead, I smiled, realizing that we embodied it.

http://www.stanforddaily.com/2011/03/31/solidarity-in-el-salvador/

The Communities Still Caught in the Honduran-Salvadoran Border Dispute

On January 27, the Salvadoran military illegally crossed over into Honduras in pursuit of four men smuggling lumber into El Salvador, resulting in a conflict with residents of Ranchos Quemados, Morazán that left two men dead (read more about the incident on our blog here and here). This morning, the Inter Press Service published an article that provides important background for understanding the conflict and the communities involved.

El Salvador and Honduras have had a border dispute since the region won independence from Spain in the early 19^th century. In July 1969, the two countries even fought a short war, in part over the border. In 1980, El Salvador and Honduras signed a peace treaty that agreed to let the International Court of Justice (ICJ) resolve the border issue, which included six different areas, one of which was the Gulf of Fonseca. In 1992, the ICJ published its final ruling awarding two-thirds of the disputed area to Honduras. As a result, the 12,000 Salvadorans living in the disputed areas found themselves living in Honduras, and 3,000 Hondurans similarly found themselves living in El Salvador.

Ever since, these populations have been living in a sort of limbo. The Salvadorans in Honduras complain that the Honduran government does not provide them with the most basic services. The Honduran government, for example, only provides the 21 communities in the Nahuaterique region with three health centers and one doctor. As a result, locals travel several kilometers on foot to the health clinic over the border in Perkin, Morazán. The clinic staff reports that 20 percent of their patients are from the Nahuaterique region. Similarly, the roads in the region are still rough, dirt roads that are nearly impassable during the rainy season.

One issue is that Nahuaterique still has not been recognized as a municipality in Honduras, and the Salvadorans living in Honduras still do not have dual citizenship. This leaves them without any voice in the Honduran government, and politicians ignore them. The 1998 Convention on Nationality and Acquired rights signed by the Salvadoran and Honduran governments was supposed to take care of these issues, but the governments have been slow to implement the provisions that guarantee these citizens citizenships, legal land titles, and other rights.

Residents of the Nahuaterique region and other neighboring communities have been involved in the lumber industry for generations, with Salvadoran communities in Morazán being their largest market. Since becoming residents of Honduras, shipping lumber from Nahuaterique to communities like Ranchos Quemados, Morazán has become illegal, turning people like the four men at the center of the conflict with the Salvadoran community into criminals.

The Salvadoran and Honduran governments must take immediate action to ensure that those residents in limbo are granted citizenship so that they may have the rights that everyone else does. Recognizing the economic and social connections between those in Nahuaterique and Morazán, the governments ought to facilitate communication and trade between the communities.

 

 

Ecuador’s Article 422 to Set Example for Rest of Region?

As El Salvador prepares for the next round of hearings before an International Commission for Settlement of International Disputes (ICSID) tribunal, a growing chorus of civil society organizations is calling for a renegotiation of CAFTA-DR (the Central American Free Trade Agreement). Their primary complaint is that the settlement dispute provisions in CAFTA-DR give private corporations the right to sue sovereign nations over investment disputes, limiting the country’s ability to protect its workers and environment. Though an ICSID tribunal recently dismissed the Commerce Group’s claim against El Salvador, Pacific Rim Mining Company’s suit claiming an estimated $100 million in lost investments and profits, lives on. You can read more about the Pacific Rim suit here, here and here).

In recent years, Ecuador has had to defend itself in several investment trade disputes similar to the one Pacific Rim has brought against El Salvador. As a result, when Ecuador adopted a new constitution last year, they included a provision (Article 422) that protects the country from international investors. Article 422 could set an important precedent for other nations in the region, including El Salvador.

Currently, Ecuador has been the subject of thirteen investment disputes before ICSID tribunals, the majority of which have involved oil and energy production. Of these thirteen cases, four were decided on the merits, three have been settled, one has been discontinued, and five remain pending. Though Ecuador won three of the four cases decided on their merits, the country has paid approximately $90 million in damages and settlements. These payments motivated Ecuadorans to reconsider their consent to ICSID and other tribunals.

Article 422 simply states that Ecuador will not sign treaties or international instruments in which the State cedes sovereign jurisdiction in instances of arbitration in contract or business disputes of any kind between the State and a natural or legal person. The exceptions are treaties and instruments that create dispute resolution mechanisms between States and persons in Latin America by regional arbitration or by judicial bodies from signatory countries.

Ecuador’s new approach has drawn both praise and criticism. Critics are concerned that parts of Article 422 are vague and will be difficult to implement, raising concerns about how it will affect Ecuador’s relationships with foreign investors. Without an adequate dispute settlement protection, the risk of investment increases, which could scare away much-needed development. Critics are also concerned that by opting out of arbitration in some cases but not others they are creating another level of discrimination in the Ecuadoran legal system, allowing domestic investors more rights than international investors. Such discrimination is troubling for a modern legal system that is supposed to be based on equality.

 

Supporters of Article 422 praise it as Ecuador’s protecting its sovereignty and national identity, which has been a priority for Ecuadoran President Rafael Correa. Though Ecuador has never been reflexively anti-U.S., the relationship between the two countries has been steeped in economic, political, and military pressure.  Article 422 is seen by many as a move to assert greater independence. It also contributes to a growing sense of Latin American regionalism by deepening the economic and political integration among its neighbors.

Though article 422 limits Ecuador’s exposure to investor-state arbitration, it allows investors to file a complaint in a domestic court. This will limit Ecuador’s exposure and protect their regulatory authority, while ensuring that investors have a way to protect themselves.

Ecuador’s move to protect itself against the onslaught of investor suits is an important development in the debate over investor-state relations. It also contributes to the renewed vision of Latin American regionalism. Whether other nations in Central and South American follow in Ecuador’s footsteps remains to be seen. But it is clear that the debate over investor rights in El Salvador and other countries is not over.

 

http://www.crowell.com/documents/ICSID-Arbitration-in-the-Americas_GAR_Ali_de-Gramont_Nov-07.pdf

 

http://www.iisd.org/itn/2008/07/17/in-depth-latin-america-s-new-model-bilateral-investment-treaties/

 

http://www.boalt.org/bjil/docs/BJIL27.2_Schill.pdf

 

https://litigation-essentials.lexisnexis.com/webcd/app?action=DocumentDisplay&crawlid=1&doctype=cite&docid=11+N.Y.U.+Envtl.+L.J.+19&srctype=smi&srcid=3B15&key=804bf01e38419d502b25eb2ea81ce9bc

 

http://www.asambleaconstituyente.gov.ec/documentos/constitucion_de_bolsillo.pdf

 

http://globalis.gvu.unu.edu/indicator_detail.cfm?Country=EC&IndicatorID=155

 

http://www.iisd.org/itn/2010/12/16/fairness-and-independence-in-investment-arbitration-a-critique-of-development-and-outcomes-of-investment-treaty-arbitration/

 

http://www.iisd.org/pdf/2006/itn_may16_2006.pdf