FESPAD supports litigation against a Canadian mining company, and El Salvador wins

Publish Date: 
Thursday, October 27, 2016

On 14 October 2016, the International Centre for Settlement of Investment Disputes (ICSID) ruled in favour of the Government of El Salvador regarding a complaint filed by the Canadian mining company Pacific Rim/OceanaGold. The company was demanding compensation in the amount of US$250 million in relation to the Government's decision to prohibit gold extraction in the department of Cabañas. With the ruling, Pacific Rim/OceanaGold must now pay the Government of El Salvador USD$8 million to cover the legal costs incurred.  

The ICSID decision, which comes after seven years of litigation, was well-received by civil society organizations in El Salvador, particularly those active in the Mesa Nacional Frente a la Minería Metálica, such as the Fundación de Estudios para la Aplicación del Derecho (FESPAD), which is also an ESCR-Net member. In a statement on behalf of FESPAD, Saúl Baños affirmed that the FESPAD team "is happy with this victory, given its significance and the fact that it reaffirms the argument made by the Mesa Nacional Frente a la Minería Metálica: OceanaGold filed a frivolous and amoral complaint."    

In 2002, the Government of El Salvador granted the Canadian company the permits required to begin mining development; however, in 2004 ex-president Elías Antonio Saca suspended authorization for the company's activities as a measure to protect El Salvador's aquiferous resources, under threat from the mining industry. Pacific Rim responded by filing a complaint against the Government of El Salvador in 2009, first in the amount of US$70 million, then US$300 million, and finally for US$250 million. 

Meanwhile, the Mesa Nacional Frente a la Minería Metálica continues to oppose mining projects that represent a danger to territories, water sources, and, above all, people - given the high population density and the small land mass of El Salvador. 

Photo credit: FESPAD