El Salvador Government, Mining

Summary of Day 1 in the Pacific Rim v El Salvador Preliminary Hearings at ICSID

As Salvadorans spent the day recovering from tropical storm Agatha (please see previous post), the preliminary hearings between Pacific Rim and El Salvador began today in Washington. The hearings are the result of El Salvador’s request that the ICSID tribunal dismiss the majority of Pacific Rim’s claims regarding their inability to secure mining permits in El Salvador.

El Salvador’s attorneys began the hearings by arguing that they were perfectly within their rights to deny Pacific Rim permits due to the mining corporation’s failure to comply with its mining laws. They argued that Pacific Rim failed to submit the required evidence that they owned or had control over the all the surface land where their proposed mining activities would take place. Of the 12.75 square km covered by Pacific Rim’s permit application, they only presented deeds or agreements for 1.6 square km. In addition, El Salvador argued that Pacific Rim never submitted a feasibility study as required by law, despite warnings from government officials that their application was incomplete without one. El Salvador’s attorneys also stressed that just because Pacific Rim had an exploration permit, they in no way had a perfect right to an exploitation permit.

In rebuttal, Pacific Rim stressed that many of the claims that El Salvador made in their opening arguments were not based on settled fact and that a full hearing is necessary to determine the facts to which the tribunal is to apply the law. They similarly argued that for this hearing the tribunal only had to consider the facts that Pacific Rim presents, accept them as true, and determine whether the law could possibly find in their favor. They claim that in these hearings, El Salvador has to overcome a high standard of showing that even if all the facts that Pacific Rim claims are true, they court still couldn’t decide in their favor.

El Salvador also argued that a waiver that Pacific Rim signed precluded their filing a separate claim for violations of the Salvadoran mining law. Pacific Rim’s attorney’s spent much of the afternoon arguing that the waiver only prohibits them from initiating a separate proceeding in another venue, and not from filing another claim with the ICSID (the mining law also refers disputes to the ICSID). El Salvador also made the case that they had not violated the most favored nation status because they had not granted permits to any other mining companies. Pacific Rim argued that there are other industries such as dams and power companies that cause greater harm to the environment, but have received environmental permits.

Following the presentations from each side, the President of the tribunal took time to gather a list of points that the panel wishes each side to consider for the second and last day of hearings, which will begin at 9:30 tomorrow morning. The tribunal listed four issues that they would like the parties to consider:

1) the general approach and interpreting article 10.20.4 of CAFTA, which covers arbitration hearings;

2) the concept and scope of the undisputed facts in accordance with CAFTA 10.20.4;

3) the waiver issue in CAFTA 10.18.2; and

4) a clear idea of what each party wants the tribunal to decide from these preliminary hearings

If you can afford the time, these hearings are very interesting and informative, and worth tuning into. Here is a link to the ICSID website where you can tune in at 9:30 tomorrow morning.

3 thoughts on “Summary of Day 1 in the Pacific Rim v El Salvador Preliminary Hearings at ICSID”

  1. Thank you for this coverage of the proceedings. We here on the WFP Nica Team are watching closely, as we have already seen the damaging results of the NAFTA tribunal cases in Mexico and Canada. This information is greatly appreciated.

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