58 Community organizations call on Commerce Group to drop $100 million lawsuit against El Salvador

News

**Forimmediate release **

In Milwaukee, contact Babette Grunow at (414) 447-8369 or Steve Watrous (414) 429-7567
In Washington, DC,contact Lisa Fuller at (202) 521-2510
In La Crosse, contact Al Gedicks at (608)785-6782
In El Salvador, contact (in Spanish)David Pereira at 011 503 2225-1906 Ext. 106
Tocoordinate translation to English, contact Sarah Bishop at (785) 727-2252

 58 Community organizations call on Commerce Group to drop $100 million lawsuit against El Salvador

Milwaukee-basedfirm suing over decision to block its mining operations after evidence ofmassive water contamination

First hearing setfor November 15 in Washington,DC

 

Milwaukee,WI,  Washington, DC: A coalition of Milwaukee and nationalorganizations called on Commerce Group, a Milwaukee-based mining corporation todrop its controversial $100 million legal case against the government of El Salvador. Fifty-eight organizations from across the country signed a statement demandingthat the case be dropped, but that there be cleanup of environmental damagescaused by the mine and compensation to victims of mine pollution.

In 2006 theSalvadoran government revoked the company’s mining permits, following evidencethat its operations were dumping highly toxic poisons into local water. In retaliation, Commerce Group filed a demand before a World Bank trade court(the International Center for Settlement of Investment Disputes, ICSID)demanding not only payment for its investments but also for tens of millions ofdollars in what it claims are “lost profits.”  The demand is being filedunder the foreign investor “protections” of the U.S.-Dominican Republic-CentralAmerica Free Trade Agreement (DR-CAFTA). The first hearing in the case willtake place on November 15 in Washington,D.C.

           Miguel Rivera, an environmental organizer with the Association for Economic andSocial Development (ADES) in ElSalvador, warned that the case and theinternational trade rules that allow it “limit the government’s ability todefend the lives of the residents” and “put economic rights above the people’sright to life.”

           Commerce Group’s mining activity in El Salvadorover the past 40 years has resulted in severe environmental and public healthproblems in the municipality of Santa Rosa de Lima,where the mine is located.  The Salvadoran government revoked CommerceGroup’s mining permit on September 13, 2006, citing devastating environmentaldamage that can’t be prevented with any existing modern technology.

           A 2006 study by Dr. Flaviano Bianchini found that the San Sebastian River,which runs through the town contains 100,000 times more acid than uncontaminatedbodies of water in the same region. The study also found levels of poisonouscyanide more than 10 times higher than the maximum allowed by the World HealthOrganization. The Investment and TradeResearch Centerin El Salvador has recentlyfiled a lawsuit against Commerce Group with the Salvadoran Attorney General toinvestigate the connection between mining activities and disproportionate ratesof death due to kidney failure in nearby communities, likely related toelevated levels of heavy metals in the San Sebastian River.

           According to Al Gedicks, professor of sociology at the University ofWisconsin-La Crosse and author of ResourceRebels, commenting on the case, said “If anything, it is CommerceGroup who should be paying for the toxic legacy they have left behind.” Gedicks is one of several scholars who have joined an international coalitionof environmental organizations, policy advocates and churches to halt thelawsuit and stop metallic mining in El Salvador. The group, the MidwestCoalition Against Lethal Mining (MCALM), includes several nationalorganizations such as Sister Cities and CISPES, the Committee in Solidarity withthe people of El Salvador.

           According to Babette Grunow of MCALM, “This lawsuit is a cynical attempt by anunsuccessful company to exploit international trade agreements to make moneythat they have been unable to make by legitimate means.”  Grunow points toCommerce Group’s own filings with the U.S. Securities and Exchange Commission,which shows no earnings since 2002, four years before their permit was revoked.“This lawsuit is nothing but a dishonest ‘get rich quick’ scheme at the expenseof an entire nation,” said Grunow.

           Chapter 11 of DR-CAFTA, under which Commerce Group has filed its suit, remainsone of the most controversial aspects of U.S. trade policy. The equivalentchapter in NAFTA, Chapter 10, has come under fire in recent years, includingfrom President Obama.  During his presidential campaign, Obama promised to“strictly limit” foreign investor protections in a renegotiation of NAFTA andto fully exempt any regulation protecting public safety.

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