Pacific Rim’s Announcement of a US $315 Million Increase in its Law Suit Against El Salvador

It was denounced by members of the National Roundtable Against Metallic Mining in El Salvador. 


Canadian mining company Pacific Rim has announced it will increase to US $315 million its demand against the Salvadoran Government for failing to grant a license to exploit gold in the El Dorado mine in its northern department of Cabañas.  Pacific Rim is suing under Salvadoran Investment Laws after the ICSID tribunal dismissed their case to sue under the US, Central America Free Trade Agreement, CAFTA-DR.

Communities and organizations that make up the National Roundtable Against Metallic Mining reject the actions by the company Pacific Rim, because they attempt to undermine the Salvadoran government’s right to practice economic policy based on public interest.

Pacific Rim’s announcement also demonstrates its contempt for the will of the Salvadoran population that has time and again exercised their right to say no to metallic mining. Resource extraction is not an option for development in our country due the serious dangers it posses to people’s health and the environment, we are particularly concerned about the impact on our precarious water resources.

We categorically deplore the hypocrisy of Thomas Shrake, Pacific Rim’s CEO, who insists on portraying the company as a creator of jobs and benefits for the people of El Salvador. As we have stated before, if the true intention of Pacific Rim were to help the democratic, equitable and sustainable development of the Salvadoran population, they should leave the country immediately rather than increasing the amount of the demand filed in 2009.

It is a contradiction for a mining company that claims to be interested in the wellbeing of a population, to seek to extort damages for lost profits from a government that has simply acceded to the demands of its population.  In particular, we are concerned about the utilization of tribunals such as the International Centre for Settlement of Investment Disputes(ICSID) to resolve conflicts with the government of El Salvador, such tribunals are undemocratic in nature and are not concerned with protecting the application of human rights nor the environment.

As long as our country is bound by free trade agreements and permissive legislation that favors corporate interests over the wellbeing of the population, we will be at the mercy of corporations that use legal systems with frivolous cases that compromise the public purse of El Salvador. Pacific Rim, is not the only mining company that has sued the country before the ICSID, US based company Commerce Group has also demanded a payment of US $100 million from the government of El Salvador. It is completely unreasonable that the public purse is on the hook for alleged damages while the Salvadoran public continues face deficits in social spending. The demand for $315 million represents one third of the national budget for education in El Salvador.

Based on the concerns raised above, National Roundtable Against Metallic Mining calls on:

The Pacific Rim Mining Company to immediately withdraw the case against the Salvadoran government.

The president of El Salvador to stop negotiating the Association Agreement with the European Union and a Free Trade Agreement with Canada, and to consider the withdrawal of El Salvador from the ICSID as many South American countries have done.

The legislative assembly to annul current investment laws and to pass legislation to stop mining

The Supreme Court of Justice of El Salvador to release promptly a resolution on the constitutional challenge launched by social organizations against CAFTA-DR in 2007.

The people of El Salvador to remain alert and organized to defend life against the extortion of multinational corporations.


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