On June 1, a tribunal of the World Bank's International Centre for the Settlement of Investment Disputes (ICSID) granted jurisdiction to Canada's Pacific Rim Mining Corp, allowing the final phase of the company's arbitration case against El Salvador to go forward. The tribunal dismissed objections filed by the Government of El Salvador, ruling that the case can proceed under El Salvador's own Foreign Investment Law. Since 2009, the Vancouver-based company has been seeking $100 million from El Salvador for having turned down the company a permit to mine gold in the northern region of Cabañas.
Since 2005, the rural communities around the proposed mining sites have organized a vibrant resistance movement to prevent the contamination of their water and land by the two tons of cyanide that Pacific Rim mining proposed to use daily to extract gold at El Dorado mine. El Salvador's National Roundtable Against Metallic Mining recently stated, "metallic mining, an industry that senselessly uses and contaminates water, is not viable in El Salvador, a small country with a high population density and a severe lack of water." Between 2009 and 2010, four environmental activists were murdered; political motivations have thus far been ignored in the investigations.The tribunal dismissed Pacific Rim’s claim that the government of El Salvador had violated the rules of the Central America Free Trade Agreement (DR-CAFTA) on the grounds that the Canadian company—which moved a subsidiary from the Cayman Islands to Nevada in 2007, presumably to take advantage of the rights afforded corporations under CAFTA—did not have "substantial business activities" in the US.However, the tribunal refused to waive millions in costs and legal fees that El Salvador has paid in order to defend itself against the CAFTA challenge; in legal fees alone, the government has paid over $5 million to date. El Salvador points out that this money which could have been used to educate 140,000 adults through the government's National Literacy Program.
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