[Cispes-update] Pacific Rim Mining opens legal process against El Salvador under CAFTA laws

CISPES National Office cispes at cispes.org
Tue Dec 16 15:03:49 EST 2008


Pacific Rim Mining opens legal process against El Salvador under CAFTA laws


CISPES update

December 16, 2008

 



Also in this update:


*        Obama gives Ambassador Glazer the pink slip <> 


*        Minimum wages to rise in El Salvador, economist calls <>  the
increases “insulting”


*        FMLN candidate Funes 13 points up in CID-Gallup <>  poll


 

 

On December 9, 2008, Canadian-based Pacific Rim Mining Corp. filed a Notice
of Intent (NOI) to begin arbitration proceedings against the government of
El Salvador.  The NOI was filed under Central America-Dominican
Republic-United States of America Free Trade Agreement (CAFTA-DR) laws, and
serves as the first step in opening up legal proceedings against El Salvador
(Canada is not a member of CAFTA but the arbitration would be filed under
its US-based subsidiary, Pac Rim Cayman.)  The company and country will have
90 days to amicably resolve their dispute.  If no resolution is reached by
March 9, 2009 – just six days before the Salvadoran presidential election —
Pacific Rim can then open arbitration proceedings under the Convention on
the Settlement of Investment Disputes Between States and Nationals of Other
States and under the Rules of Procedure for Arbitration Proceedings of the
International Centre for Settlement of Investment Disputes (ICSID)—an
affiliate of the World Bank.

 

Pacific Rim maintains that it has invested over $75 million dollars in the
El Dorado mining project and that there is potential for huge returns and
the creation of new jobs.  The company claims that, despite its compliance
with all laws, the government of El Salvador has failed to grant the permits
to begin to exploit the gold and silver mine.  An eventual lawsuit is
expected to demand several hundred million dollars in damages from El
Salvador, an amount that would further damage a country that is already in a
dire economic situation, in part due to the effects of the CAFTA-DR accord.

 

Citizens' organizations in El Salvador have come out very strongly against
mining, and specifically against the El Dorado project.  Environmentalists
contend that the project would lead to acid drainage, water pollution, and
the evaporation of cyanide, thus devastating the environment and public
health.  The “I Reject Metal Mining” campaign is a combined effort of a
broad spectrum of environmental, labor rights, and community organizations
that has held many demonstrations and educational events throughout the
country.  Some political analysts have suggested that the timing of the NOI,
putting the end of the 90-day grace period just days before the presidential
elections, opens the possibility that the governing Nationalist Republican
Alliance (ARENA) party could claim that a victory by the leftist Farabundo
Martí National Liberation Front (FMLN) party would open El Salvador to
losing the several hundred million dollar lawsuit.

 


Obama gives Ambassador Glazer the pink slip


 

On December 3, US President-elect Barack Obama announced that, as of his
inauguration, all US ambassadors that were politically appointed by the Bush
Administration should vacate their posts.  US Ambassador to El Salvador
Charles Glazer, a Bush political appointee, is one of the ambassadors that
have been asked to relinquish their positions on January 20, 2009.

 

Many within the opposition political and social movements in El Salvador
view Obama’s victory in November as a blow to the ARENA party in the lead-up
to El Salvador’s 2009 municipal, legislative, and presidential elections.
The dismissal of Ambassador Glazer reinforces this notion. Glazer, who has
been the ambassador since January 16, 2007, has spent the last two years
fortifying a close relationship between El Salvador’s governing right-wing
Nationalist Republican Alliance (ARENA) party and the Bush Administration.

 

In a June 2008 meeting with a CISPES delegation, Ambassador Glazer admitted
to intervention by the US on behalf of the ARENA party during the 2004
Salvadoran presidential elections. However, he expressed hostility towards
the delegation throughout the meeting and dismissed the delegates' concerns
about intervention and potential fraud in the 2009 elections, as well as
concerns about documented cases of human rights abuses in the country. 


Minimum wages to rise in El Salvador, economist calls the increases
“insulting”


 

In the first week of December, the Minimum Wage Council of El Salvador
agreed to an increase in minimum wages that will be effective on January 1,
2009.  Economist Raúl Moreno, research coordinator of the Foundation for the
Study of the Application of Law (FESPAD), called the increase of 8% for the
industrial, commercial, agricultural, and service sectors and 4% for textile
workers “insulting.”  Workers in the commercial sector will only see their
monthly salary go from $192.30 to $207.68, the industrial sector from
$188.10 to $203.15, and the textile sector from $167.10 to $173.78.  These
wages are still significantly lower than the estimated $360 basic cost of
living, which only includes food costs and a fraction of the costs of basic
services and goods.  Moreno expressed concern that minimum wage increases
should be paired with responsible regulation of the market, warning that
otherwise “the trickle-down effect will also appear” and increase the costs
of many goods.

 

Former sweatshop worker-turned-union organizer Estela Ramirez explained that
that the increase “is a joke and shows that the government couldn't care
less about us, particularly the sweatshop workers.”  El Salvador’s Central
Reserve Bank reports that workers’ salaries only make up 32% of the gross
domestic product (GDP) of the country, while business profits make up 62% of
the Salvadoran GDP.  “The businesses keep making money while the government
does nothing to lower the high costs of food and lets our families starve.
The raises are not in accordance with the cost of living,” Ramirez said.

 

The minimum wage increase comes at a time when all political parties are in
the midst of campaigning for the upcoming municipal and legislative
elections in January of 2009 and the presidential elections in March of
2009, causing some to believe that the motive of the increase is to bolster
support for the governing right-wing Nationalist Republican Alliance (ARENA)
party, which is lagging behind the left-wing Farabundo Martí National
Liberation Front (FMLN) in the latest presidential polls, as well as many
municipal and legislative races.


                


FMLN candidate Funes 13 points up in CID-Gallup poll


 

The latest poll by international polling firm CID-Gallup, conducted November
15-23 and released on December 3, 2008, shows the Farabundo Martí National
Liberation Front (FMLN) presidential candidate, Mauricio Funes, with a 13
point lead over the governing Nationalist Republican Alliance (ARENA)
party’s candidate, Rodrigo Ávila.  When asked which presidential candidate
they would vote for if the elections were held today, 44% of those polled
selected Funes, while only 31% selected Avila.  Another 19% were undecided
and 5.9% would vote for candidates of the Party for National Conciliation
(PCN) or the Christian Democrat Party (PDC).

 

Reaction among civil society organizations, and on the streets of San
Salvador, echoes the poll's findings. A representative of the Movement of
Technicians and Intellectuals of El Salvador (MPTIES) recently stated that,
“for 20 years, El Salvador has been governed by the same right wing party,”
which has applied policies “that benefit a few, rather than the poor.”  A
street vendor, who did not want to be identified, said “We can’t continue to
vote for a party [ARENA] that does not identify with us [the people]. They
are mercenaries. We should vote for change, and that is the FMLN.” 

 

Funes’ continued success in the polls demonstrates the current unity and
strength of the FMLN party as the municipal, legislative, and presidential
elections of 2009 approach.  

Funes has drawn in many members of the population who were not previously
members of the FMLN party with his platform of change and hope, which
focuses on increased social investment and generating more jobs in the
country.

 

Thus far, ARENA candidate Ávila, former chief of the National Civilian
Police, has failed to unite or excite the Salvadoran right and continues to
lag in the polls. The nomination of ARENA’s vice-presidential candidate,
Arturo Zablah – who had previously criticized the right-wing party and
insisted it was imperative to remove ARENA from power –  further illustrates
the divisions created by the failed policies of 20 years of ARENA
governance. 

 

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