Pacific Rim case against the Salvadoran government begins

The first hearing in the Canadian mining company Pacific Rim’s case against the government of El Salvador was held on May 31 at the International Center for Settlement of Investment Disputes (ICSID) in Washington, DC. At stake is a $100 million claim that the company was improperly denied a mining permit; in addition the government argued that the company did not meet all the requirements for technical and economic feasibility studies.

Lawyers for the National Roundtable on Metalic Mining in El Salvador reacted to the initial hearing, saying that the proceedings ignored the essential role of local communities in determining whether mining projects can or should go forward, and the environmental risks associated with such projects.

Pacific Rim applied for the operating license in 2005 to open a mining project in the department of Cabañas, in the north of the country. It is suing for losses incurred on investments made during exploration work. Pacific Rim filed the suit based on the Central America Free Trade Agreement (CAFTA), specifically chapter 10 on investments and chapter 12 on dispute resolution.

The economic and investment focus of the dispute was heavily criticized by Luis López, a lawyer for the National Roundtable on Metalic Mining in El Salvador. "Environmental issues and the rights of the local communities are not being discussed," he says. "This operating license is being treated as just another permit, without taking into account the fact that this country is very small and densely populated, and those issues [the environment and people’s rights] will only be addressed as secondary issues."

That is why the Roundtable, with the support of Oxfam America and the Center for International Environmental Law (CIEL) will be sending an 'amicus curiae'-- a friend of the court brief-- to the ICSID. This is a way for organizations and people directly affected to get involved in a case of this kind, between a transnational company and a government. "With the 'amicus curiae' we're going to introduce new elements that will have to be taken into account, such as the environmental issue" says López. "We want all aspects of the dispute to be discussed."

A second hearing is scheduled for August, when both parties will produce further evidence to support their positions. The dispute is expected to be settled in August or September of this year.