The
CAFTA Report
Pacific Rim files its
artibration case
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The
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Pacific Rim files its
artibration case
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By The CAFTA Report (May 1, 2009) A Nevada subsidiary of the Canadian Pacific Rim Mining Corp. has filed for international arbitration against the government of El Salvador under the Central American Free Trade Agreement. The announcement came in a press release. The dispute centers on a claim that the government has failed to finalize the company's permit to mine gold. The company said it was seeking compensation for hundreds of millions of dollars in losses. The case has broad significance within the free trade area because extractive companies frequently run into local opposition or government delays to their projects. The company said it is acting for itself and on behalf of its two subsidiaries, Pacific Rim El Salvador, S. A. de C. V. and Dorado Exploraciones S. A. de C. V. Since 2002 the two subsidiaries have been exploring for and discovering gold deposits in El Salvador, said the company. As a result the various companies have invested $77 million and "have operated in full compliance with Salvadoran law, including the country's environmental, mining and foreign investment laws, and have met or exceeded all applicable standards while conducting business in El Salvador," said the company. The company's claims that the government breached international and Salvadoran law due to its improper failure to finalize the permitting process as it is required to do. A mine design for the El Dorado gold project located in the Department of Cabanas, was submitted to the government in its final form more than two and a half years ago, said the company. Despite strong local support and the inclusion of carefully engineered and reliable environmental protections for the proposed El Dorado Mine, the government has not met its responsibility to issue the permits necessary to advance the project to the final step of full production, said Pacific Rim. The arbitration request was filed with the Centre for Settlement of Investment Disputes. The center is a dependency of the World Bank. In December, the company filed a notice with the government of its intent to arbitrate the case. The new development is the actual filing of the case. The case appears to be the first filed under the arbitration clauses of the free trade agreement. "We deeply regret that we have been forced to pursue our legal rights through the initiation of a CAFTA action," said Tom Shrake, manager of Pac Rim Cayman LLC, the Nevada corporation, and president and CEO of Pacific Rim, adding: "While we regret having to take this action, we fully intend to pursue the company's rights vigorously. Sadly, it is not just the rights of Pac Rim that are being compromised, but the rights of all Salvadorans and future foreign investors. The people of our local communities are being denied the benefits of over 400 recently active exploration jobs, approximately 600 jobs to develop and operate the mine, and the benefits of numerous community and social programs." Shrake said the companies have let go 400 local workers over the last nine months in what he called the the single poorest region of El Salvador, where one of every three people lives in extreme poverty. He said that gold mining will be a significant contributor to the economy of El Salvador particularly with the world in the midsts of an economic crisis. He said the finished project would create thousands of jobs and that the companies were committed to operating a safe and environmentally-sound mine. |
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