The Washington Post , August 14, 2005 Sunday
HEADLINE: A Toxic Trade-off , BYLINE: Daphne Eviatar ,
Pressing for passage of the Central American Free Trade Agreement at a White House news conference in May, President Bush made the case that a vote for CAFTA was a vote for democracy.
But lawmakers who voted to pass CAFTA in late July may not have realized that a part of the trade agreement threatens to do just the opposite. That's because of a little-understood legal clause included in CAFTA, the North American Free Trade Agreement (NAFTA), and other, already existing bilateral investment treaties (BIT). Designed to protect foreign investors against unfair treatment by a signatory state, these "investor-state arbitration" provisions actually hand foreign businesses powerful rights that trump the interests or desires of local citizens.
Take the example of the current bid by U.S.-Canadian corporation “Glamis Gold Ltd.” (later acquired by “Goldcorp”) to mine the ore in Guatemala's Western highlands. Local community and church leaders have vigorously protested the company's plans to dig an open-pit gold and silver mine in the department of San Marcos. They contend that the mining process, which uses cyanide to extract gold from ore, could leach deadly toxins into the surrounding water supply. After construction began in 2004, the indigenous poor -- who make up most of the region's population and depend on scarce local water -- began protesting the mine. They continued for months into this year, even though the government dispatched the military to quell the protests and local leaders reportedly received death threats. .
In response to these health and safety concerns, the government of Guatemala could decide either to ban the cyanide process or to require the company to compensate surrounding communities for their risk. But stopping the Glamis project now could be costly: Under CAFTA, the government of Guatemala could be liable for tens of millions of dollars.
How can a multinational corporation that objects to local environmental, health or safety regulations sue a national government? That license is provided under NAFTA. Once CAFTA is signed, it will provide the same right. In each case, a provision of the agreement allows a foreign corporation to sue a national government for money damages if it believes that the actions of the federal, state or local government in a given country are discriminatory, violate international law or can be considered -- directly or indirectly -- an expropriation of the company's investment. If complying with an environmental regulation makes a project no longer worth the cost, a company can claim that its investment has been expropriated by the state.
(è. Inject human rights consideration into BIT. E.g. when corporation sue government, government can defend indigenous people by invoking HRIA: “did you (corporation) conduct HRIA before commencing a project?” )
Whether the company is in the right won't be decided by an independent judge, however. Rather, it will be decided by a panel of three private international arbitrators chosen by the parties involved. These arbitrators are often corporate lawyers, who, in another suit, could be representing the investor. Affected citizens are not parties to the case. The government's right to protect the water supply in Guatemala, then, could be decided by British or American lawyers, for instance.
(è. affected citizens are not party to the, case because technically speaking subject of the arbitration is governmental activity toward corporation.)
And it's not just a matter of a powerful multinational corporation challenging a struggling Central American country. In fact, Glamis, the company that's digging the mine in Guatemala, has already brought a similar legal action against the United States. In 2003, Glamis filed for arbitration under NAFTA, claiming that environmental and historic preservation regulations passed in California after the company had received a federal permit to dig there amount to an expropriation. The regulations, championed by then-governor Gray Davis in response to strong local protests, require that open-pit gold mines be backfilled and returned to their pre-mined condition after the ore has been depleted. Claiming that the cost of backfilling would destroy the future economic value of its project, Glamis brought a $50 million claim against the United States. (The matter hasn't been resolved yet.)
Defenders of arbitration provisions claim that critics' concerns are overblown, and emphasize that, unlike Canada and Mexico, the United States has yet to lose one of these cases. Still, many legal experts argue that the provisions violate state and national sovereignty: They allow foreign investors to make an end-run around the federal courts, which usually rule on the legitimacy of public laws. As Justice Sandra Day O'Connor wrote after NAFTA's adoption: "Article III of our Constitution reserves to federal courts the power to decide cases and controversies, and the U.S. Congress may not delegate to another tribunal 'the essential attributes of judicial power.' Whether our Congress has done so with respect to tribunals (created by different treaties and agreements) is a critical question." John Echeverria, executive director of Georgetown University's Environmental Law and Policy Institute, puts it more starkly: "Congress is virtually sleepwalking through a revolutionary, and likely highly destructive, alteration of the American constitutional system of government."
(è. Objection! , then, signing on optional clause in art. 36 of ICJ Statute is likely against US Constitution? As much as Article III of US Constitution empowers judiciary hear the case, US Constitution empower President to make treaty, which includes a provision whereby the US delegates an authority to adjudicate to a treaty body. And also the decision of whether to make a decision handed down by the treaty body self-executing is also left with President and/or Congress. ISD (investor –state dispute system) is revolutionary and could be destructive yet is not inherently unconstitutional, I guess. See Medellin, the US Supreme Court acknowledged that the US has obligation to execute the decision by ICJ with split over branch for the execution. The Court did not state compromissory clause is unconstitutional.)
Echeverria is referring to the threat to U.S. sovereignty when, for example, the Canadian division of Glamis challenges the legitimacy of a California law by suing the United States. With agreements like CAFTA between rich and poor countries, the sovereignty question also has another, more sinister twist: Although these treaties protect corporations against the vagaries of unpredictable governments, they can also make it easier for corrupt national leaders to ignore the interests of their own populations and sign lucrative contracts with foreign corporations. This is a longstanding problem with extractive industries like mining and the countries that depend on them. And this sort of corruption is one reason why poverty in those countries has soared in recent decades. According to the United Nations, in 1981, 61 percent of people in mineral and energy exporting countries were living on less than $1 per day; by 1999, that number was 82 percent.
Of course, companies need some protections when they invest. If Guatemala suddenly nationalized its mining industry, for example, seizing all foreign-owned mines, foreign corporations would understandably be aggrieved. But enacting environmental, health or safety regulations is a different matter. The United States Supreme Court has made clear that even if a regulation significantly reduces the value of a company's investment, the government needn't compensate that loss. Environmental regulations are part of the cost of doing business. It's far cheaper to dump toxic waste into a river than to dispose of it safely, but we still want our government to impose the cost of safe disposal on companies creating the hazard.
(è. Rationale of ISD)
"The mining industry spews almost half of all toxic emissions in some countries, in the process ruining local agriculture and causing a substantial boost in respiratory disorders and raising cancer rates," according to a recent, critical report on investor arbitration rights written by Oxfam America and Friends of the Earth. Mining will only encourage real development, they conclude, if it's properly regulated.
Increasingly, people in developing countries are demanding just that. And it's a sign of progress. If democratically elected governments enacted laws in response to these legitimate concerns, that would be another important step; in fact, it'd be exactly what we want "developing" countries to do. And it's what the United States government claims to be encouraging.
è. ISD should serve as a hurdle to such laws
Unfortunately, with the proliferation of trade and investment agreements that hand foreign investors surprisingly broad rights, local governments are losing the power to protect their people, environment and economy. Investor protection clauses "essentially restrict the ability of governments to impose public interest or environmental regulations on corporate operations," says Keith Slack, an extractive industries expert for Oxfam America. And this hinders the very sort of development that would, in the long run, make poor countries not only better places for people to live, but far better places for American corporations to do business.
These arbitration provisions also highlight the inconsistency of the Bush administration's approach to sovereignty under international law. According to many legal experts (including lawyers now bringing these claims), the significance of investor-state arbitration provisions, which wasn't clear at the time NAFTA was enacted under the Clinton administration, in the last few years has become so. The Bush administration has refused to sign the Kyoto Protocol to reduce greenhouse gases and the treaty creating the International Criminal Court on the grounds that these treaties threaten U.S. sovereignty. But when it came time to push for Congressional support of CAFTA and other trade pacts that compromise U.S. sovereignty for the benefit of big business, the administration's concerns about the integrity of our legislative and judicial system had disappeared.
The debate over these sorts of agreements isn't over whether or not to have "free trade." All trade is regulated -- just a quick glance at the 22 chapters of CAFTA alone makes that plain. The conflict is over which rules will make the liberalization of trade benefit both foreign investors and local villagers. A trade agreement that binds the hands of local governments for the benefit of foreign corporations will only undermine democracy -- and in the long run, global development itself.
The Washington Post , August 20, 2005 Saturday
HEADLINE: Judging the Quality of Oversight
Regarding Daphne Eviatar's Aug. 14 Outlook article, "A Toxic Trade-Off": I have come to expect twisted reasoning and half-truths from Oxfam America and Keith Slack, but I expected your paper to be more discerning.
Mining is indeed regulated, quite intensely so, from exploration through reclamation.
Experience shows that Oxfam has instigated many of the protests of mining operations that more than meet international environmental and social standards while building infrastructure and generating employment. In the case of Glamis Gold Ltd.'s Marlin project in western Guatemala, half of the annual $5 million payroll goes to local employees and another third to Guatemalans from other parts of the country. The company, directly and through the Sierra Madre Foundation, which it established, has been engaged in forestry and reforestation, health care and community development even before mine production begins.
Inconsistent, non-timely application of environmental regulation, as occurs occasionally in the United States, is very costly to companies, which is why Glamis Gold has sued on behalf of its California operation, although I think Glamis should have just set aside more funds for reclamation and not sued. Bilateral trade agreements can address settlements, litigated or arbitrated, of cross-border environmental disputes and can attempt to address poor regulatory practices. These agreements can do little or nothing to overcome the weaknesses of local and national administrations in Latin American countries. Nor can mining companies or foreign nongovernmental organizations.
-- Leni S. Berliner , Washington
The writer chairs M3 Investment Group, a private group providing advisory and financial services to the global mining industry. M3 is not an investor in Glamis Gold
The Washington Post , August 23, 2005 Tuesday ,
HEADLINE: Mining Under CAFTA
Daphne Eviatar [Outlook, Aug. 14] should have contacted Glamis Gold Ltd. before printing incorrect accusations relating to the company's project in Guatemala.
Glamis, as structured, could not bring the sort of claim under the Central American Free Trade Agreement that the article suggested it might.
Canada is not a signatory to CAFTA, and Glamis is a Canadian corporation; its American subsidiaries do not have any investment in the Guatemala project.
Contrary to the assertions that critics made in the article, the project meets all environmental, health and safety regulations and complies with North American and World Bank environmental standards. The article also seemed to imply that industry and host countries are engaged in corruption, which is false and offensive. Equally offensive was the linkage of mineral development to poverty.
Further, it was misleading to say "local community and church leaders" oppose our project. The reality is that there are many views, including significant project support from indigenous communities and leaders.
Ms. Eviatar cited a report by Oxfam America and Friends of the Earth that she said had concluded, "Mining will only encourage real development . . . if it's properly regulated." I agree. Glamis, the Guatemalan government, the World Bank/International Finance Corporation, local communities and a number of nongovernmental organizations will make certain that the Guatemala project is so regulated. This is the reality of a modern, responsible mining industry.
KEVIN McARTHUR
President and Chief Executive
Glamis Gold Ltd.
Reno, Nev.
..
States News Service , June 24, 2010 Thursday ,
CIEL: Guatemala suspends marlin mine - human rights and environmental organizations applaud the decision, urge president Colom's government to protect communities against retaliation
.
The following information was released by the Center for International Environmental Law: (CIEL)
..
Guatemala's President Alvaro Colom announced yesterday that he is suspending operations at the Marlin mine, which is operated by Vancouver-based Goldcorp, Inc. According to the Guatemalan government, the process to shut down the mine might take months. The Center for International Environmental Law and MiningWatch Canada are calling on the government to complete the administrative process in a timely fashion.
.
The decision comes amid intense criticism that the mine has caused widespread human rights violations and endangered the health of the surrounding indigenous communities. Last month the Inter-American Commission on Human Rights (IACHR), an independent body of the Organization of American States (OAS), called on the Guatemalan government to suspend operations at the mine.
(= = did IACHR take into consideration the HRIA? E.g. by amicus brief )
.
"We applaud the decision of the Government of Guatemala to honor its international human rights obligations and suspend operations at the Marlin mine," said Kristen Genovese, senior attorney at the Center for International Environmental Law. "The Marlin mine has always been the source of conflict in the communities. At this critical time when tensions are running high, we urge the government to take appropriate measures to ensure the safety of all involved."
.
The Marlin gold mine in San Miguel Ixtahuacn, Guatemala has been plagued by controversy ever since it began operating in 2005. The Mayan communities affected by the mine have asserted that they never gave their consent to the mine, a right protected under international law. Precautionary measures included in the IACHR's May 20 decision requested the Government of Guatemala to suspend operations at the Marlin mine until the commission could consider the complaints by the communities. A delegation from the IACHR is expected to visit Guatemala in July.
(= = injunction by IACHR)
.
Evidence of the harmful impacts of the mine has mounted over the last several months. Just last week, the United Nations Special Rapporteur on the situation of human rights and fundamental freedoms of indigenous people, James Anaya, visited the Marlin mine and urged the government to comply with the IACHR decision.
(= = interplay between HRIA and indigenous people)
.
In March, the International Labor Organization (ILO), called for suspension of mining activities at the Marlin mine until the consultation and studies required by ILO Convention No. 169 were conducted. Last month, a study released by Physicians for Human Rights and scientists at the University of Michigan found that a sample of residents living near the mine have higher levels of mercury, copper, arsenic and zinc in their urine, and of lead in their blood, than a sample of persons living seven kilometers away.
.
"We are encouraged that the Guatemalan government is taking the Commission's decision seriously," said Jamie Kneen of MiningWatch Canada. "We also ask that the government acknowledge the communities' concerns and investigate, for example, where exactly the contamination is coming from and what can be done to improve the current situation."
..
Goldcorp's own Human Rights Impact Assessment (HRIA) released last month recommended that Goldcorp "[h]alt all land acquisition, exploration activities, mine expansion projects, or conversion of exploration to exploitation licenses." The HRIA, which was conducted without the widespread support or participation of the communities affected by the Marlin mine, found widespread human rights abuses at the mine, including the right to consultation, right to property, right to freedom of association and collective bargaining, and failure to create effective grievance mechanisms for its employees and community members.
(= = IACHR’s opinion seem to have preceded HRIA)
i) Human rights abuse, ii) right to consultation, iii) right to property, iv) right to freedom of association and collective bargaining (ILO), v) failure to create effective grievance mechanisms (remedy)
.
"The communities affected by the Marlin mine applaud the Government's decision to comply with the Precautionary Measures of the IACHR," said Javier de Leon, President of the Association of the Integral Development of San Miguel (ADISMI). "Nevertheless, we are worried about the threats that we have received. We have been told that there will be consequences for defending our rights. We call upon the international community to monitor the situation."
..
.
MiningWatch Canada (MWC) is a pan-Canadian initiative supported by environmental, social justice, Aboriginal and labour organisations from across the country. It addresses the urgent need for a co-ordinated public interest response to the threats to public health, water and air quality, fish and wildlife habitat and community interests posed by irresponsible mineral policies and practices in Canada and around the world.
.
