Sierra Club on CAFTA-Commerce Group Ruling



Contact: Elizabeth Wagner (202) 548-4595 

Statementof Sierra Club's Rachel Ackoff, Associate Washington Representative, onCAFTA Challenge to El Salvador's Environmental, Public Health Policies 

Washington- Sierra Club released the following statement on yesterday’s CAFTA ruling, which dismisses on a technicality a mining corporation's challenge to El Salvador's environmental, public health policies that will still cost El Salvador $800,000 in legal fees.

"Whilewe welcome the World Bank tribunal’s decision yesterday to dismiss on atechnicality the Commerce Group’s suit against the government of El Salvador, we find it outrageous that the people of El Salvador will be forced to bear the burden of $800,000 in legal fees spent defending the right to protect its people and environment. 

CAFTA’sflawed investment provisions allow companies to attack common sense public health and environmental laws. The fact that El Salvador not onlyhad to defend its legitimate policies but now is faced with paying $800,000 in legal fees, shows how this system is in desperate need for reform. The investor-state dispute mechanism should be replaced with a state-to-state mechanism to guarantee the crucial role of governments inprotecting the public interest. Short of this reform, broad provisions like the right to a “minimum standard of treatment” can be narrowed, exceptions can be incorporated to protect legitimate environmental laws,and domestic remedies can be exhausted. 

Asthe Obama administration negotiates its first trade deal, the Trans-Pacific Partnership, it must steer away from the failed investmentprovisions of the past and chart a new course for a true 21st Century Agreement." 

Background on the case: 

CommerceGroup Corp is a Wisconsin-based company that owns a San Sebastian Gold Mine in El Salvador, less than three miles northwest of the city of Santa Rose de Lima. Commerce Group’s mining activities over the past 40 years have resulted in severe environmental and public health problems. The Salvadoran government revoked Commerce Group’s mining permit in September 2006 for failure to comply with the country's mining law, including failure to meet the requirements for an environmental permit. In March of 2009, Commerce Group Corp and San Sebastian Gold Mines, Inc retaliated by filing a suit under CAFTA, demanding $100 million in compensation from the Salvadoran government. Yesterday a ruling was issued by the International Centre for Settlement of Investment Disputes, determining that the dispute was not within its jurisdiction, and ordering each side to bear one-half of the costs of arbitration and each to bear its own legal fees and expenses.


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