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March 22, 2011
Oxfam Urges Obama to Support El Salvador Mining Ban
    by Robert Kropp

On the occasion of the President's visit to the country, Oxfam calls on him to support the government in a trade dispute with a gold mining company.

President Obama arrives in El Salvador today as part of his Latin America tour, and Oxfam America has taken the occasion to highlight the environmental and human rights impacts of mining practices in that country.

In a press conference held yesterday, Keith Slack, Senior Policy Advisor for Oxfam America, referred to those impacts, saying, "Serious human rights problems have been going on for quite some time. In 2009, three people involved in the opposition to mining in El Salvador were killed."

One of those murdered, Gustavo Marcelo, was a community leader and environmental activist who led the resistance against the mining activities of Pacific Rim Mining, a Canadian corporation. In June, 2009, his body was found, showing signs of having been tortured.

Basing its right to mine in El Salvador on the
United States-Dominican Republic-Central America Free Trade Agreement (CAFTA), enacted under former President W. Bush, Pacific Rim has sued the government of El Salvador in international courts, demanding either $77 million in losses or the right to mine in the country.

Having received exploration permits from the government in power then, Pacific Rim began gold mining exploration in El Salvador in 2002, investing $80 million in the discovery of numerous gold mining sites in the northern region of the country. However, as environmental concerns mounted, a popular movement arose in El Salvador; according to Oxfam, 96% of El Salvador's surface water is contaminated, and only three percent of original forest cover still stands.

Responding to the popular movement, the government of El Salvador refused to issue permits for gold extraction, and in fact issued a moratorium on mining projects in the country. Pacific Rim then sued the Salvadoran government under a chapter of CAFTA which allows corporations to sue governments when their potential for profit is thwarted.

Because it is headquartered in Canada, which is not a signatory to CAFTA, Pacific Rim transferred a subsidiary to Nevada to take advantage of the agreement. However, the US is a signatory, and thus has the right to intervene in such disputes as the one in El Salvador.

Right to Know, Right to Decide campaign emphasizes the importance of free, prior, and informed consent by communities that would be affected by such mining activities as those pursued by Pacific Rim. According to Oxfam, the principle "means that communities have a meaningful voice in decision-making about whether oil, gas, and mining projects are built on their land." The principle "has been recognized by intergovernmental organizations and international bodies and increasingly in the laws of states," Oxfam continued.

In its 2009 report,
Metals Mining and Sustainable Development in Central America: An Assessment of Benefits and Costs, Oxfam found that despite its long history, mining in El Salvador and other Central American has never played a significant role in their economies. As Raymond Offenheiser, President of Oxfam America, stated upon the publication of the report, "Metals mining is often associated with vast wealth. Unfortunately, this is not the reality in many developing countries where natural resources continuously fail to contribute to the long-term reduction of poverty and communities have little say in how the industry affects their lands and livelihoods."

Stack of Oxfam America added at the time, "Communities closest to the mines almost invariably suffer."

Urging President Obama to use such proposed strategies as his Partnerships for Growth to develop "a more coordinated US approach with countries that have shown a strong commitment to good governance and sustainable development," Offenheiser stated, "The Salvadoran government has recognized that not all foreign investment is good for the country. The Obama administration should help ensure that El Salvador's development strategy is in the best interest of the people and protects human rights and the environment."

The Dodd-Frank Wall Street Reform and Consumer Protection Act passed by Congress last summer directed the Securities and Exchange Commission (SEC) to address disclosures by extractive industries, a development which has been applauded by many sustainable investors. Speaking with about the proposed regulations, Paul Bugala, Sustainability Analyst for Extractive Industries at
Calvert, said, "Companies get the investors that they ask for. The disclosures included in Dodd-Frank recognize an environment in which ESG (environmental, social, and corporate governance) risks are material for high-risk industries."

Last fall, demonstrators in Cambridge, Massachusetts demanded that
TIFF Advisory Services, an investment manager for nonprofit organizations, divest its holdings in Pacific Rim. The demonstration was organized by Miguel Rivera, the brother of the slain Salvadoran activist.

In March of this year, a
lawsuit filed against the government of El Salvador by Commerce Group and San Sebastian Gold Mines, alleging breaches of CAFTA similar to those involved in the Pacific Rim suit, was dismissed by the International Centre for Settlement of Investment Disputes (ICSID).

Determining "that the dispute is not within its jurisdiction and competence pursuant to CAFTA," the ICSID Tribunal found entirely in favor of the government of El Salvador.


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