An Australian mining company insists its “right” to a guaranteed profit is superior to the right of El Salvador to clean drinking water–and an unappealable World Bank secret tribunal will decide if that is so.
Drinking water is the underdog here. It might be thought that Salvadorans ought to have the right to decide on a question as fundamental as their source of water, but that is not so. It will be up to a secret tribunal controlled by corporate lawyers.
And as an added bit of irony, the hearing began on El Salvador’s Independence Day, September 15. Formal independence, and actual independence, alas, are not the same thing.
The case, officially known as Pac Rim Cayman LLC v. Republic of El Salvador, pits the Australian gold-mining company OceanaGold Corporation against the government of El Salvador. OceanaGold is asking for an award of $301 million because the Salvadoran government won’t give it a permit to open a gold mine that would poison a critical source of drinking water on which millions depend.
OceanaGold–or, more specifically, its Pacific Rim subsidiary, which it bought in November 2013–has spent only a small fraction of the $301 million. That sum isn’t an attempt to recover an investment; it represents the amount of profits the corporation alleges it would have pocketed but for El Salvador’s refusal to give the company a permit. (El Salvador has had a moratorium on new mining permits since 2008.)
So here we have an increasingly common scenario under “investor-state dispute mechanisms”–environmental laws designed to safeguard human and animal health are challenged as barriers to corporate profit. Not simply to recover an investment that didn’t pan out, but supposed future profits that a company claims it would have earned.
Should El Salvador prevail, it would still have lost because it will spend large sums of money to defend this case, money that could have been used for the welfare of its people.
An added insult in this case is that it is being heard not under one of the “free trade” agreements that elevate corporations to the level of (or above) a country, but under an El Salvador law passed by the former right-wing government that has been since reversed.