Following on the heels of Canadian mining company PacificRim’s lawsuit against the government of El Salvador, a Milwaukee,Wisconsin-based mining company, Commerce Group Corporation, has brought its own$100 million suit. Commerce Group has been operating the San Sebastian goldmine in the eastern part of El Salvador on and off in for over 40 years. TheMinistry of the Environment revoked their exploitation permit in 2006 due toenvironmental damage.

The community of Santa Rosa has been severely affected bythe operations at the mine. A 2006 study by Italian environmental scientistFlaviano Bianchini found that the local river is 100,000 times more acidic thanuncontaminated bodies nearby. The study also found levels of cyanide more than10 times higher than the maximum allowed by the World Health Organization. Thecommunity indirectly consumes this water, used for washing clothes and dishesand to water crops and animals. Most of the community members no longer drinkthe water from the river and are forced to pay for water from uncontaminatedwells; those who cannot afford clean water still drink from the pollutedriver. 

                  InSeptember 2007, the Center for Investment and Commercial Research (CEICOM)presented a complaint to the Attorney General’s office calling for aninvestigation into environmental damage caused by the mine. Though the AttorneyGeneral did conduct a study, it was of different metals than those identifiedin studies, and thus. decided to take no action.

                  InJune of 2009, Commerce Group filed a lawsuit against El Salvador demanding $100million dollars in compensation for lost profits, despite the fact that,according to their own reports to the Securities and Exchange Commission, themine has not turned a profit since 1999. The investor protections of theUS-Dominican Republic-Central American Free Trade Agreement (CAFTA) allowforeign companies to sue governments for profits or potential profits that are“indirectly expropriated,” including by environmental regulation; NAFTAcontains the same provisions. The case is being heard by a panel of corporatelawyers at the International Centre for the Settlement of Investment Disputes(ICSID), housed at the World Bank. Their decision may be kept private and thereis no appeal. 

                  Apreliminary hearing was held on November 15th, 2010 in Washington, DC to decidewhether or not to accept El Salvador’s motion to dismiss the case. Stay tunedat www.cispes.org for the upcoming decision.

                  Therehas been a strong reaction against Commerce Group at home in Milwaukee, led bythe Midwest Coalition Against Lethal Mining (MCALM), a coalition of LatinAmerican solidarity organizations, environmental organizations, students,professors, and local churches, many of whom have built strong relationshipswith communities in El Salvador through sister parishes. In November, MCALMcirculated a letter signed by over 70 organizations, calling on Commerce Groupto drop the lawsuit against El Salvador, clean up the pollution, providecompensation to the victims and respect the sovereignty of El Salvador.Representatives of the coalition presented this letter to Commerce Group in aface-to-face meeting at their headquarters in December. Dan Kasun of Milwaukeecommented, “It appeared obvious that [Commerce Group’s comments] attempted toeither minimize culpability or prove willfully ignorant of the obviousenvironmental and health impact of the Commerce Group's mining operations."In January, CISPES joined MCALM in launching its first Action Alert againstCommerce Group, mobilizing people across the country to demand that they dropthe lawsuit and get out of El Salvador. If you live in the Midwest and wouldlike to join the coalition, please contact us at (202) 521-2510. Many thanks toour partners at U.S.-El Salvador Sister Cities for the background informationpresented here and for their leadership in this campaign!