Trading Away Peoples' Rights

Trading Away Peoples’ Rights

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By Kate Horner

April 2010

For over a decade, Friends of the Earth has been fighting against little known provisions in our trade agreements that grant broad privileges to multinational corporations and put profits ahead of the public interest. These trade policies allow companies to sue governments for adopting health or environmental laws that may reduce their current or future profits.

Unfortunately, our worst nightmares have just come true for our friends and allies in El Salvador, which is facing a lawsuit under the Central American Free Trade Agreement (CAFTA).

Table of Contents

President’s Column

Introduction: A Crude Awakening

Behind the Scenes:
Severin Skolrud

Ethanol Greenwash:
Not Clean, Not Green

Ending Corporate Control in Congress

Trading Away Peoples’ Rights

Costing Oceans an Arm and a Leg

Toxic Dispersants in the Gulf

Global Solutions for a Global Crisis

Clean Energy Future:  Available Now

Pacific Rim Mining Corp., a Canadian-based multinational firm, wants to establish the El Dorado project, massive gold mine in El Salvador. El Salvador is a small, densely populated country the size of Massachusetts, and is one of the poorest in the Western hemisphere. The country has precariously few water resources; it has lost 20 percent of its surface water in the past 20 years, and 95 percent of the remaining water is reportedly contaminated.

Pacific Rim’s mine would use cyanide to process ore in the basin of El Salvador’s largest river, the Rio Lempa, which provides water to more than two million residents of San Salvador, the country’s capital city. Gold mining is notoriously hard on water resources and the proposed El Dorado mine would consume around 100 liters of water per second and use more than two tons of cyanide per day. In other parts of Central America gold mining has exacted a harsh toll on both the environment and people, leaching cyanide into local water supplies, contaminating nearby environments with toxins, and sickening local communities – who remain in poverty despite the wealth generated by mining.

With gold prices soaring, mining companies have filed dozens of permits for new mines in El Salvador, prompting a vigorous national debate about the role of mining in the country. The government convened a commission to review mining policy, and communities in northern El Salvador that would be impacted by gold mining have strongly voiced their opposition to expanded mining. Their concerns have been echoed by prominent religious and human rights organizations. With public opposition over the health and environmental implications of mining at a new high, Pacific Rim never completed the feasibility study necessary to obtain an operating permit for the El Dorado project.

In December 2007, a subsidiary of the firm reincorporated in Nevada under the name Pac Rim Cayman LLC. The new U.S. subsidiary then sent a letter to the Salvadoran government threatening to sue them under CAFTA. In July 2008, the firm ceased exploratory drilling at El Dorado. But by the end of the year, it formally launched a CAFTA claim for hundreds of millions in compensation for their “wasted” investment and “lost” future profits as a result of El Salvador’s mining safety policy. The first hearings on this case began on May 31 in Washington, DC.

In the run-up to this hearing (which was procedural in nature), Friends of the Earth hosted and organized a U.S. advocacy tour for Miguel Rivera, the founder of ASIC (Association of Friends of San Isidro Cabañas), and Vidalina Morales de Gámez, from the National Coalition Against Metallic Mining. Rivera and Morales are community representatives fighting the case and they shared their experiences with the U.S. media and Congress. Every day, these activists demonstrate remarkable personal bravery to fight for the environment and for their community. Tragically, Miguel’s brother Marcelo, another prominent anti-mining activist, was assassinated in 2008.

By early August, the tribunal is expected to either dismiss the case or allow hearings on jurisdiction and standing to proceed. Regardless of the outcome, Friends of the Earth remains committed to reforming trade policy so that companies can no longer use the threat of international suits to intimidate countries into settling for large sums of money, or into freezing adoption of new environmental standards. In tandem with our friends and colleagues in the labor, religious, and agriculture communities, we are committed to passing comprehensive trade reform legislation. Encouragingly, half of the House Democratic caucus is a co-sponsor of The Trade, Reform, Accountability, Democracy and Employment Act (TRADE), a progressive bill that would fix the investor-state lawsuit provisions and other problems in our trade agreements.