Paying the High Price of Gold

By Brooke Denmark Witness for Peace International Team- Nicaragua

This article originally appeared in the Canadian journal Alternatives International.

It is no secret that gold mines wreak havoc on the environment. Less widely known is the incredible amount of power free trade agreements have granted to gold-mining corporations to cause this damage. The North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA), as well as other pacts, include chapters that allow corporations to sue signatory nations for lost profits if a new law, such as an environmental or health regulation, threatens its investment. This is exactly what is happening now in El Salvador. A decision is imminent in the first case of its kind to be heard under CAFTA, Pacific Rim Mining Corp. vs. El Salvador. Anti-mining groups, environmentalists and trade justice activists throughout the Americas are poised for a response from the CAFTA tribunal, which could set a precedent for mega-projects throughout the region.

Pacific Rim, a Canadian-based mining corporation, is suing the government of El Salvador for violating its investor rights under Chapter 10 of CAFTA. The company claims that the government of El Salvador violated its investor rights by failing to issue a permit to begin operations. Since Canada is not a member of CAFTA, Pacific Rim is suing El Salvador under a U.S. subsidiary. The government of El Salvador acted in response to calls from a wide network of civil society groups, including communities potentially affected by the mine, environmentalists and the Catholic church, who rallied together to block the mine. They argued that the mine will contaminate El Salvador’s already limited water supply and cause serious environmental and health issues. Individuals involved in the movement have met violent repression for their opposition and the case is already stained with blood. Four Salvadoran anti-mining activists have been assassinated over the past two years. Those cases remain unresolved.


There are many international actors at play in the corporate web of gold mining. To trace the genealogy of the San Martin mine in Honduras, for example, we begin with Honduran company Entre Mares. Entre Mares used to operate as a subsidiary of Glamis Gold, a formerly Nevada-based gold company which was bought out by Goldcorp in 2006 to form the world’s third largest gold mining company. Three years before merging with Goldcorp, Glamis Gold was entangled in a similar struggle as Pacific Rim.

In 2003 Glamis Gold began a suit against California under NAFTA’s Chapter 11 for $50 million in damages. Glamis Gold brought the case against California after the state denied the corporation the right to construct an open pit mine. California reacted to outcry from environmental and indigenous rights groups arguing that the mine would cause environmental destruction and encroach on sacred sites. In this case, in order to submit a claim under NAFTA, Glamis Gold attempted to file as a Canadian company even though it was based in Nevada at the time. The tenuous nature of this claim is one of the reasons why it failed.


For now, social and environmental justice groups hope that the Pacific Rim decision will fall on the same side as the NAFTA tribunal’s ruling in the Glamis Gold case. A win in El Salvador would show the international community that groups resisting invasion of these mines stand a chance against a Goliath.

All photos taken by Fernando Reyes in Valle Siria, Honduras.

#CAFTA #GoldMining #PacificRim #WitnessforPeace

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