Discussion on Goldcorp at Salvadoran Consulate – Tuesday, October 30

This morning we (Voices staff) received an invitation for an important event next Tuesday evening (October 30^th) concerning the Cerro Blanco Mine in Guatemala and the environmental implications for El Salvador. The event is sponsored by the Salvadoran Consulate, the Office of the Ombudsman for Human Rights in El Salavdor, and CISPES.

The Cerro Blanco mine, which is owned and operated by Goldcorp –a Canadian mining company –, is in the Guatemalan province of Jutiapa. Environmentalists and local communities are concerned that mining activities will contaminate Lake Guija, which spans the border between El Salvador and Guatemala. Salvadoran environmentalist David Pereira explained a couple years ago that “toxic waste water from the mine will flow into the 45 square kilometers of Lake Guija, and on into the Lempa River, the main river basin in El Salvador.” Fears are substantiated by a study produced by Dina Larios, professor of geochemistry and hydrology at Ohio University, that contains serious warnings about wastewater from the mine.

Here’s some information on the event:

 “Implications of the Cerro Blanco mine on the El Salvador/Guatemala Border Area”

Report presented by the Ombudsman for Human Rights and the Center for Investigation of Commerce and Investment to the Inter-American Commission of Human Rights in Washington DC

Date:             Tuesday, October 30

Time:            6:00 pm

Place:            Salvadoran Consulate

2332 Wisconsin Ave. NW

Washington DC 2007

RSVP:            camelgar@rree.gob.sv or (301) 437-7698

We don’t hear as much about mining in El Salvador these days, but that doesn’t mean it isn’t a huge issue. As long as there is gold, silver, and other minerals of value there will be people trying to extract them.

So if you’re in DC on Tuesday, please try to attend.

Pacific Rim heads to Panama

This morning Pacific Rim announced that they are starting the process of acquiring Clifton Mining company’s Remance project in Panama. This announcement comes less than 24 hours after Pacific Rim announced they are delisting from the NYSE AMEX.  While Pacific Rim tried to put a positive spin on the delisting announcement, its a fairly serious development in the company’s ability to raise the capital necessary to continue its operations in El Salvador, including their expensive CAFTA claims. The timing of the announcement is surely a signal from Tom Shrake and Catherine McLeod-Seltzer that they aren’t throwing in the towel quite yet.

The terms of the deal seem pretty good for Pacific Rim – it’s a formal option agreement that allows Pacific Rim to explore and apply for permits before committing to purchase. Upfront they will pay Clifton $200,000 and give them 5 million shares of Pacific Rim stock, which is selling for around $0.20/share. If at the end of an “Option Period,” during which Pacific Rim will explore, complete its environmental analysis, and apply for permits from the Panamanian Govnerment, Pacific Rim wants to take 100% ownership of the mine, they will pay Clifton $5,000,000 in cash or common stock.

Even with such good terms, Pacific Rim will still need to come up with the capital for their new exploration activities. Their delisting from the NYSE AMEX makes them pretty unattractive for most investors.  Unless Pacific Rim or Clifton already has a financer lined up, its hard to see how they will be able to do much with their new property.

In the company’s press release they stress that the Remance site is geologically similar to the El Dorado site in Cabanas – meaning that there is a lot of gold that could make them rich. They also point out that unlike El Dorado, the Remance site is in a remote location with few inhabitants and no agriculture. I suppose after tangling with civil society organizations in Cabañas and the complexities of Salvadoran politics, Tom Shrake and Catherine McLeod-Seltzer need a more remote location – somewhere quiet where they can go lick their wounds.

Proposed Trade Act of 2009 May Lead to Change in Arbitration Provisions in CAFTA and Other Trade Agreements

Congressman Michael Michaud (D-ME) and 106 other members of Congress recently introduced the TRADE (Trade Reform, Accountability, Development, and Employment) Act of 2009, which calls for a reevaluation of international trade agreements.  The bill would in part require existing and future trade agreements to include a ban on investor-state dispute settlement mechanisms, providing for state-to-state dispute resolution instead. Currently, Chapter 10 Section B of CAFTA-DR permits investors to sue a government if their investment has been undermined in a manner that amounts to expropriation, or violation of the national treatment or the most-favored-nation treatment standards outlined in Section A of Chapter 10.

Currently, Pacific Rim Mining Corporation is pursuing arbitration over its mining investment in Cabanas, claiming that the Salvadoran government violated its rights under Chapter 10 of CAFTA, Section A when they denied the mining company exploitation permits. Prior to CAFTA-DR, Pacific Rim would have had to take its complaint to their own government, and asked them to seek arbitration on their behalf – state to state. In fact, state-to-state dispute resolution remains a principle of international law, and only signatories to CAFTA, NAFTA and other trade agreements are subject to a claim by a non-state actor.

Provisions such as those found in Chapter 10 of CAFTA and other agreements give non-state investors unprecedented rights and influence over the domestic affairs in a foreign country.  For centuries, international and domestic law has embraced the principal that foreign affairs are best handled by states, and in the case of the U.S. the executive branch. Giving non-state investors the right to sue a sovereign state not only undermines a government’s ability to care for the needs of its people, but can also undermine the foreign policy and national interests of the investors’ native country.

Civil society organizations in the U.S. and Latin America have expressed their support for the bill, joining the Obama Administration, the U.S. State Department Subcommittee on Investment, and others who believe that non-state investors should not have the right to sue a foreign government.  President Obama has stated in the past, “with regards to provisions in several [Free Trade Agreements] that give foreign investors the right to sue governments directly in foreign tribunals [he would] ensure that foreign investor rights are strictly limited.”  The State Department Subcommittee on Investment of the Advisory Committee on International Economic Policy Regarding the Model Bilateral Investment Treaty recommends the change to state-to-state dispute resolution mechanisms proposed in the TRADE Act, because it would require investors to first exhaust domestic remedies and allow governments to prevent frivolous or harmful claims.

The need to protect foreign investors from expropriation and enforce national treatment and most-favored-nation standards are very legitimate. However, even under the state-to-state dispute resolution system, Pacific Rim would still be able to seek restitution, but they would have to first convince either the Canadian or U.S. government (they have registered corporations in both countries) to negotiate a settlement or seek arbitration on their behalf.  If their claim was legitimate, either government should have been more than willing to advocate on their behalf.  As it is, Pacific Rim has successfully divided the country of El Salvador, and caused the government to invest valuable resources into defending itself against lawsuit that will likely turn out to have little merit.

If passed, Congressman Michaud’s TRADE Act of 2009 would be the first step in restoring balance and order to the international community and prevent the interests of a few corporations to trump those of sovereign nations.

Mining and the Presidential Elections: Rep. Rohrabacher, Paul Behrends, and Pacific Rim

Days before El Salvador’s recent presidential elections, a small chorus of Representatives from the U.S. Congress spoke out against the FMLN political party and their presidential candidate Mauricio Funes. Of those that spoke out, Rep. Dana Rohrabacher (R-CA) was one of the most vociferous.

In a speech on the floor of the House of Representatives, Rep. Rohrabacher labeled the FMLN a pro-terrorist political party that has links to Iran, al-Qaeda, the FARC, Cuba, and Hugo Chavez. He added that while Salvadorans are free to vote for whomever they like, if they elect the FMLN, the U.S. should end the temporary protective status (TPS) for Salvadorans in the U.S., and cut off the flow of remittances to El Salvador. Rep. Rohrabacher and officials from the State Department made similar threats during the 2004 presidential elections in El Salvador, contributing to the ARENA’s victory over the FMLN.

Despite the last minute threats, on March 15, 2009 Salvadorans elected Mauricio Funes as their next president. While Rep. Rohrabacher’s comments on the House Floor caused a stir the week before the elections, the media has largely ignored them in their coverage of the Funes victory. Rep. Rohrabacher on the other hand posted a C-SPAN video of his speech from the House floor on the front page of his official website.

Contrary to Rep. Rohrabacher’s threats, El Salvador’s relationship with the U.S. remains strong. President Obama and Secretary of State Clinton both called to congratulate Funes on his victory, and to schedule meetings with him at an upcoming summit. Funes –a moderate and a party outsider– has reiterated that he will respect trade agreements and international law, seek to stem the flow immigration, and maintain strong ties with the U.S.

Within hours of Rep. Rohrabacher and others making statements regarding the FMLN, thousands of U.S. citizens were calling the State Department to demand a statement of neutrality from the Obama Administration. State Department officials readily obliged by restating their neutrality and willingness to work with the next Salvadoran president. The statements made by Rep. Rohrabacher and others beg the question – do these Congressmen have intelligence or information on the FMLN that the State Department and President do not have, or were other interests in the balance? We propose that the answer may lie in Rep. Rohrabacher’s connections with the Pacific Rim Mining Corporation’s struggle to secure mining permits in El Salvador.   Click here to keep reading