Pacific Rim Ups Claim against Salvadoran Government to $315 million
On Tuesday, April 2nd, Canadian mining company Pacific Rim announced it has increased its lawsuit against the government of El Salvador in a World Bank court to $315 million, equivalent to 1/3 of the country’s annual healthcare budget. The company is suing for potential future profits lost as a result of the government’s denial of the company’s bid to mine for gold in the northern Salvadoran province of Cabañas in 2005 following massive popular resistance to the risk-laden process.
In 2009, the Canadian company filed two cases against El Salvador in the International Center for Settlement of Investment Disputes (ICSID): one under the US-Central American Free Trade Agreement (CAFTA), filed by way of a US subsidiary that Pacific Rim acquired for the occasion; and another under El Salvador’s internal investment laws.
In the midst of a major international grassroots campaign against the company, the ICSID rejected Pacific Rim's $77 million case under CAFTA in June 2012, but allowed the company’s second claim to continue to trial.
In a press release, the Salvadoran National Roundtable Against Mining condemned Pacific Rim’s “attempt to undermine the Salvadoran government’s right to practice economic policy based on public interest” and the company’s effort to “extort damages for lost profits from a government that has simply acceded to the demands of its population.”