American Complicity

The government of the United States could be responsible for claims leveled on El Salvador in the International Center for the Mediation of Differences in Investments (CIADI), a corporate tribune to the World Bank. If the charges are found to be true, El Salvador could be obliged to pay $200 million to the Pacific Rim and Commerce Group, which are extractive multinational corporations based in the United States.

First, the Free Trade Agreement between Central America and the Dominican Republic with the United States (CAFTA-DR) today serves the mining companies well as a legal platform to prosecute the states that don’t bend to their interests. These penalties and regulations were inflicted on El Salvador by the United States Congress in 2003, an initiative of the nefarious Bush Administration.

Said commercial agreement, which could be overturned by the valiant magistrates of the Constitutional Office of the Supreme Court of Justice, was approved in an inconsiderate manner and against basic constitutional principles: its chapters on investment and controversy resolution put the country on its knees in the face of the designs of transnational corporations.

The dispositions referring to “indirect expropriation,” “national treatment” and “most favored nation” are truly legal aberrations that impair the principle of national sovereignty, the right of self-determination and the governmental possibilities of implementing public policies that fulfill human rights.

The most absurd of these is the “indirect expropriation” that, according to the CAFTA-DR, is any government action or omission that affects the profits or the prospective profits of investors. For example: an environmental regulation that obliges companies to invest in less-contaminating technology, laws that establish better working conditions, etc.

It is because of this legal ‘logic’ that the mining companies in question are blackmailing the El Salvadorian government by filing this suit with the CIADI. The case in question is over the negation of a permit for the exploitation of minerals in San Isidro (Cabañas) by Pacific Rim, and the suspension of an operating license for Commerce Group in Santa Rosa de Lima (La Unión).

The other dispositions indicated that CAFTA-DR is also harmful to the other state signatories of the free trade agreement. For example, the “national treatment” obliges states to give transnational corporations the same benefits that they give to nationals. In this sense, CNN can be subsidized as much as a community radio station that is favored for promoting local culture.

Second, the United States is an accomplice of Pacific Rim and Commerce Group for supporting their arbitration management. In the case of Commerce Group, the backing is logical, because it is an American company; however, this backing is unacceptable because the company has committed grave environmental crimes, among them the contamination of the San Sebastian River.

However, the help given to Pacific Rim is a scandal, given that the American authorities granted U.S. citizenship to this Canadian mining company so that they could establish for themselves a headquarters in the United States in order to become part of the CAFTA-DR as an American company, and then sue the Salvadoran state for refusing their extractive projects.

Because of this, the governments of the United States and Canada are accomplices to the mining companies that extort El Salvador with their millionaires’ demands in the CIADI. Furthermore, the government of Canada pressures the Central American countries with their signature of the trade agreement, just as its American ally does with CAFTA-DR.