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Like Water for Gold in El Salvador | The Nation

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Like Water for Gold in El Salvador

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Duarte explained that the Spanish firm, backed by four technical experts from other countries, had carried out a lengthy study of the issues and was consulting with people affected by mining, ranging from mining companies to the Roundtable groups. While he hoped this process would produce a consensus, Duarte admitted it was more likely the government and the firm would have to lay out “the interests of the majority,” after which the two ministries would then make their policy recommendation. (Roundtable members had told us that the first group consultation, about ten days earlier in San Salvador, had turned into a pitched debate between them and representatives of the mining companies.) “If new laws are necessary,” Duarte informed us, “then it will go to the legislature.”

About the Author

John Cavanagh
John Cavanagh is the director of the Institute for Policy Studies and author, most recently, of Development Redefined:...
Robin Broad
Robin Broad is a professor at American University's School of International Service. Her most recent book, co-authored...

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We proceeded to the national legislature, its hallways a cacophony of red posters bearing the photos of FMLN leaders (and the ever-present martyr Archbishop Oscar Arnulfo Romero, assassinated in 1980 by the right) competing with offices adorned with posters of the leading opposition party, ARENA. We came to meet FMLN members of the legislature’s environment and climate change committee, including Lourdes Palacios, a three-term member from San Salvador with purple glasses and an easy smile. Palacios explained that they were ready with a bill to ban metals mining, but at the request of the executive branch, they were waiting for the outcome of the review before introducing it.

A representative from the department of Chalatenango, just west of Cabañas and an FMLN stronghold, expressed impatience at how long the review was taking and his conviction that “economic and political powers” were “putting pressure on non-FMLN legislators.” For the FMLN legislators, he stressed, “the pressure is the will of the people, and we are convinced that the majority of the people don’t want mining.” The FMLN does not have an absolute majority in the legislature; still, those present expressed confidence that the ban could pass if the executive branch recommended it. One legislator suggested that El Salvador might have an easier time saying no than countries already dependent on revenues from gold exports.

Given the human rights situation in Cabañas, we interviewed the government’s human rights ombudsman, a post created after the 1992 peace accords, to be selected by, and report directly to, the legislature. The current ombudsman is Oscar Luna, a former law professor and fierce defender of human rights—for which he too has received death threats. We asked Luna if he agreed with allegations that the killings in Cabañas were “assassinations organized and protected by economic and social powers.” Luna replied with his own phrasing: “There is still a climate of impunity in this country that we are trying to end.” He is pressing El Salvador’s attorney general to conduct investigations into the “intellectual” authors of the killings. Several people have been arrested in connection with Marcelo Rivera’s assassination, but the attorney general’s office appears to be dragging its feet in digging deeper into who ordered and paid for the killings. Critics told us that the attorney general, appointed by the legislature as a compromise candidate between ARENA and the FMLN, has failed to investigate aggressively a number of sensitive cases involving politicians, corruption and organized crime.

Our interactions in Cabañas and San Salvador left us appreciative of the new democratic space that strong citizen movements and a progressive presidential victory have opened up, yet aware of the fragility and complexities that abound. The government faces an epic decision about mining, amid deep divisions and with institutions of democracy that are still quite young. As Vidalina reminded us when we parted, the “complications” are even greater than what we found in Cabañas or in San Salvador, because even if the ban’s proponents eventually win, “these decisions could still get trumped in Washington.”

A Tribunal That Can Trump Democracy

Protesters around the globe know the sprawling structures that house the World Bank in Washington, yet few are aware that behind these doors sits a little-known tribunal that will be central to the Salvadoran gold story. The Salvadoran government never approved Pacific Rim’s environmental impact study, and thus never gave its permission to begin actual mining. In retaliation, the firm sued the government under the 2005 Central American Free Trade Agreement. Like other trade agreements, CAFTA allows foreign investors to file claims against governments over actions—including health, safety and environmental measures and regulations—that reduce the value of their investment. The affected farmers and communities are not part of the calculus. The most frequently used tribunal for such “investor-state” cases is the International Centre for Settlement of Investment Disputes, housed at the World Bank.

In the words of lawyer Marcos Orellana of the Center for International Environmental Law, who assisted the Roundtable in drafting an amicus brief for the tribunal, Pacific Rim “is trying to dictate El Salvador’s environment and social policy using CAFTA’s arbitration mechanism.” Pacific Rim’s “claim amounts to an abuse of process.” The brief methodically lays out how Canada-headquartered Pacific Rim first incorporated in the Cayman Islands to escape taxes, then brazenly lobbied Salvadoran officials to shape policies to benefit the firm, and only after that failed, in 2007 reincorporated one of its subsidiaries in the United States to use CAFTA to sue El Salvador.

For this article we attempted to interview Pacific Rim board chair Catherine McLeod-Seltzer, but her office steered us to the CEO of Pacific Rim’s US subsidiary, Thomas Shrake. In a tersely worded e-mail, he “respectfully denied” our request.

Pacific Rim is demanding $77 million in compensation. A case brought against El Salvador by another gold-mining company, Commerce Group, was dismissed earlier this year on a technicality, but the government still had to pay close to $1 million in legal fees and for half of the arbitration costs. Dozens of human rights, environmental and fair-trade groups across North America, from U.S.-El Salvador Sister Cities and the Committee in Solidarity With the People of El Salvador (CISPES) to Oxfam, Public Citizen, Mining Watch and the Institute for Policy Studies, are pressuring Pacific Rim to withdraw the case.

Many believe that even if Pacific Rim withdraws its case or loses in this tribunal, the very existence of “investor-state” clauses in trade agreements is an affront to democracy. “For democracy to prevail,” Sarah Anderson of IPS told us, “citizens’ movements and their allies in governments must work hard to eliminate these clauses from all trade and investment agreements.”

Back in Santa Marta, citizen groups are building sustainable farming as an alternative economic base to mining. Their goal: a “solidarity economy,” or, as Vidalina termed it, a “people’s economy.” Explained Vidalina: “We reject the image of us just as anti-mining. We are for water and a positive future. We want alternatives to feed us, to clothe us.”

Elvis Nataren, a philosophy student, led us to the riverbank and pointed to communal land where organic farms will be built. Three towering greenhouses already contain plump hydroponic tomatoes, green peppers and other vegetables. Together these should make Santa Marta self-sufficient in corn, beans and vegetables. As Elvis explained, “food sovereignty” was even more urgent in the wake of CAFTA’s passage, given the cheap foreign produce that began to flood the Salvadoran market. Elvis, Vidalina, Miguel, Francisco and others we met in Cabañas were well aware that as they nurture farmlands and the river vital to this alternative future, their success also depends upon struggles and debates in San Salvador and Washington.

A month after we returned home, the death threats against individual youths at Radio Victoria escalated, with such ominous untraceable text messages as: “look oscar we aren’t kidding shut up this radio or you also die you dog…”

And in June, nearly two years after Marcelo Rivera’s murder, the body of a student volunteer with the Environmental Committee of Cabañas was found dead, with two bullets in his head. As the Roundtable press release noted: “The last time he was seen by fellow environmental activists was…distributing fliers against metallic mining in [Cabañas] in preparation for a public consultation about the mining sector taking place nearby.” “Not another mine, not another death,” implored the Roundtable.

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