« | Home | »

When Mining Firms Sue

Tags: |

Last week a fracking company was refused permission to drill in the South Downs National Park. Celtique Energie is considering an appeal to Eric Pickles to overrule the decision. He might be reluctant to cause a furore in West Sussex, but would he feel the same if aggrieved companies could sue the government for lost profits? This can happen if foreign firms have access to an investor-state dispute settlement, as provided for in the new trade agreements being finalised by the EU with Canada and the US. Ministers reassure us that the provisions are nothing new, without mentioning that US companies are the world leaders in making ISDS claims. The two main ISDS tribunals, run by the World Bank and the UN, operate behind closed doors, with private attorneys who rotate between being judges and advocates, and have no appeals mechanisms.

North American mining companies appear to find making claims against foreign states almost as profitable as prospecting for minerals. Lone Pine Resources, registered in Delaware, is using an ISDS to bring a $250 million suit against Canada for not allowing it to frack under the St Lawrence River. Big money is already being made by suing poor countries in Latin America that have signed trade agreements with ISDS clauses and struggle to meet the legal bills (typically $8 million per case). Peru is being sued for $800 million by Renco for ordering a pollution clean-up that allegedly forced the company into bankruptcy; Costa Rica for $94 million by Infinito Gold. In October 2012, in the biggest ever ISDS award, Occidental Petroleum was granted $1.7 billion (plus interest) for a terminated contract in Ecuador.

Pacific Rim is suing the El Salvador government for $301 million for refusing a gold mining permit. To make the original claim in 2009, it shifted its HQ from the Cayman Islands to benefit from the ISDS clause in a US trade agreement. When this was rejected, it moved the claim to the World Bank’s tribunal, which begins its secret hearing of the case today. According to El Salvador’s rejoinder, Pacific Rim never complied with the requirements for a mining permit in the first place, preferring to rely on lobbying of government ministers. It didn’t own all the land involved or have permission from landowners. Activists have been threatened or killed and water supplies polluted during exploration.

Canadian mining firms are looking forward to the ‘remarkable agreement’ that could soon be signed between the EU and Canada. Like the TTIP between the EU and US, the CETA hasn’t been published, but both agreements are believed to include sweeping ISDS clauses. France’s moratorium on fracking since 2011, defended twice in domestic courts, could be especially vulnerable to ISDS claims from the US or Canada. In Britain, where George Osborne thinks there is a broad consensus in favour of fracking, local prohibitions or regulations to control it could be threatened under the treaties. Fortunately, Germany seems to be having last-minute doubts about signing them.

In 2008 El Salvador imposed a moratorium on all new mining operations. Pacific Rim’s suit is the first challenge against it, and defending it cost the government $5 million before the case even went to court. If the claim succeeds in full, El Salvador will have to pay the mining company the equivalent of half its national health budget. Today is El Salvador’s independence day. As the country celebrates 193 years of freedom from Spanish rule, its sovereignty is under threat from a private company, pressing its claim behind closed doors at the World Bank.

Comments on “When Mining Firms Sue”

  1. James Alexander says:

    For anyone who would like to know this – 38 Degrees has a petition and campaign you can sign up to, at either

    http://www.38degrees.org.uk/ (home page, featured at time of posting)

    or

    https://secure.38degrees.org.uk/pages/ttip_home (dedicated page)

  2. John Perry says:

    George Monbiot’s latest Guardian piece uses the El Salvador example cited here, only that he mistakenly says the $300m claim equals half the government’s budget, not half of its HEALTH budget. See http://www.theguardian.com/commentisfree/2014/oct/07/bullying-corporations-enemy-within-business-politicians?commentpage=1

Comment on this post

Log in or register to post a comment.


  • Recent Posts

    RSS – posts

  • Contributors

  • Recent Comments

    • mototom on At Mount Rushmore: On Tuesday Trump accidentally hit the nail on the head. He said this:"Many of those people were there (Charlottesville) to protest the taking down of ...
    • Stu Bry on Trump set them free: Bob Dylan playing Only A Pawn In Their Game at the March On Washington comes to mind. Time and energy would be better spent opposing the Keystone X...
    • Graucho on Trump set them free: If you thought Nixon was paranoid and vindictive, you ain't seen nothing yet https://www.theregister.co.uk/2017/08/14/feds_demand_data_on_every_visit...
    • davidovich on Labour and ‘Traditional Voters’: I remember the seventies when most of my friends hitch-hiked clean across Central Asia including Afghanistan to arrive to jobs in Britain and a vibran...
    • Sarah Klenbort on Nicaraguan Sign Language: Yes, fascinating article! I've heard of other instances of deaf children creating language on the playground in various schools in Africa when given t...

    RSS – comments

  • Contact

  • Blog Archive

Advertisement Advertisement