The Global Fight Against Corporate Rule
Over the past several decades, multinational corporate Goliaths have helped to write and rewrite hundreds of rules skewing tax, trade, investment and other policies in their favor. The extraordinary damage these policies have caused has become increasingly apparent to the communities and governments most directly affected by them. This, in turn, has strengthened the potential of a movement that’s emerging to try to reverse the momentum. But just like David with his slingshot, the local, environmental and government leaders seeking to revise rules to favor communities and the planet must pick their battles carefully.
One of the most promising of these battles takes aim at an egregious set of agreements that allow corporations to sue national governments. Until three decades ago, governments could pass laws to protect consumers, workers, health, the environment and domestic firms with little threat of outside legal challenge from corporations. All that changed when corporations started acquiring the “right” to sue governments over actions—including public interest regulations—that reduce the value of their investments. These rights first appeared in little-known bilateral investment treaties. Twenty years ago, corporate lawyers embedded them in the North American Free Trade Agreement (NAFTA). Today, more than 3,000 trade and investment agreements and even some national investment laws grant foreign investors these powers.
The Obama administration is attempting to insert similar anti-democratic investor protections in new trade and investment agreements with countries that border the Pacific and with the European Union. Hoping to expedite the so-called Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), congressional leaders introduced fast-track trade promotion legislation on January 9 that would severely limit Congress’s ability to amend such agreements. The widely anticipated move set off a storm of protest from unions, environmentalists, liberal members of Congress and others, and will likely remain a high-profile fight in the coming weeks.
The forces aligned against these proposed agreements are not alone. Activists across the globe are developing creative and increasingly effective strategies to push back against investor assaults on their communities, environment and national sovereignty. An important front has opened up in El Salvador, where a multinational firm is using investor powers to sue the government over the “right” to mine gold. This case represents an extreme assault on democracy, as local communities, the majority of the Salvadoran public and the Salvadoran government all oppose the gold mining. But what’s happening in El Salvador is not an anomaly. There are crucial battles brewing in several other Latin American countries—including Argentina, Venezuela, Bolivia and Ecuador—as well as in other parts of the developing world.
At the very least, these struggles should give the Obama administration pause as it considers the next round of trade agreements. But what makes them so strategic—and promising—is that powerful citizen groups are persuading governments to take up the challenge. As they do, they are building momentum in a broad global fight against investor rights.
* * *
Salvadoran land sits atop a wide belt of gold running down the middle of Central America, a vein that has enticed profiteers for more than a century. In the early 1900s, the US miner Charles Butters began plundering the region using a lucrative process that employed cyanide to separate gold from rock. Within years, Butters was making millions. But what he seems not to have contemplated—and what the farmers in these parts know well—is that the area is vulnerable to earthquakes and tropical storms, both of which make it difficult to contain the toxic chemicals used to mine gold. And no one appears to have known that the heavily concentrated sulfides found in the rock that often surrounds gold become sulfuric acid when they are exposed to the elements during the extraction process. The acid leaches other toxic materials into the soil and water. In July 2012, at the San Sebastián site of the mine that Butters opened more than a century ago, the Salvadoran environment ministry found levels of cyanide and iron that were through the roof.
The areas affected by gold mining will remain contaminated for centuries unless the companies are kept out and forced to pay for costly cleanup. Yet El Salvador is not suing the mining firms for such destruction. Instead, in 2009, at a tribunal housed in an imposing World Bank building just a few blocks from the White House, firms sued the Salvadoran government for not letting them mine. One of them, Canada’s Pacific Rim Mining Corporation, is demanding either that it be allowed to mine in northern El Salvador or that the government pay it over $300 million in damages, an amount equivalent to more than 1 percent of the Salvadoran economy.
Over the course of several trips we have taken in recent years to learn about the local movement against mining, corn and bean farmers have led us up and down the hills of northern El Salvador, guiding us through the streams that feed the Lempa River. This river, which flows from Guatemala through El Salvador and then along the border with Honduras before it plunges south into the Pacific Ocean, provides water to more than half the country’s people. One of our guides was Miguel Rivera, a local “pro-water” activist whose older brother Marcelo, a popular educator, was brutally assassinated in 2009 after organizing many in his community against gold mining.
Miguel and his colleagues brought us through different parts of the Lempa watershed to show us pollution from agribusiness, factories, hog farms and gold mining. Along the way, Miguel, who has become a trained water expert, often paused to test it for toxins and other substances. We visited the site of Butters’s San Sebastián mine, which has been closed for years but continues to leach toxic substances into the streams. Some days, the water was Kool-Aid orange; on others, it was Ocean Spray cranberry.
As the prices of gold and other metals skyrocketed after 2000, multinational firms like Pacific Rim rushed to apply for permits to mine in resource-rich regions like the Salvadoran province of Cabañas, where Miguel lives. Initially, the farmers of this poor region were intrigued by the prospect of good jobs, but a number of them visited the mines in neighboring Honduras and returned with horror stories of disease, polluted rivers and few actual jobs. A community activist told us, “We learned how much water the mining companies would use to mine, and water became a big issue. Mining uses a lot of it, and we had little.” Some visited the old Butters site in San Sebastián, where the orange and cranberry waters sealed their opposition.
Local activism on the proposed Pacific Rim mine—including cultural work led by Marcelo Rivera and a radio station run by local youth—spread in Cabañas and across El Salvador. Farmers, students, people of faith, lawyers and human-rights activists formed the National Roundtable Against Metallic Mining, and won over politicians and even the mainstream Catholic church. By 2007, a national poll showed that more than 62 percent of Salvadorans opposed metals mining. As Miguel Rivera and others continually stressed to us, the slogan of the Roundtable was “We can live without gold, but we can’t live without water.”
When the progressive FMLN party won the presidency in 2009, the newly elected president, Mauricio Funes, pledged not to issue mining permits during his five-year term, a promise he has kept. In other words, El Salvador has quietly become the first nation on earth to stop destructive gold mining.