“When Corporations Sue Governments” – December 4, 2014

In 2004, the Pacific Rim mining company applied to dig for gold in El Salvador. Pacific Rim (since acquired by…OceanaGold) assured the government…that its work would be eco-friendly and would generate jobs. But with 90 percent of the country’s surface water contaminated, and fearing damage to the Lempa River …the administration failed to approve the proposal. In 2008…[El Salvador] instituted a moratorium on new mining permits…Pacific Rim fought back in 2009, filing a $77 million lawsuit with the International Center for Settlement of Investment Disputes (Icsid), a World Bank-affiliated institution…[The] final Icsid hearing opened in September; a verdict is expected in 2015.  International arbitration is considered by its proponents to be relatively objective…Today, countries from Indonesia to Peru are facing investor-state suits. Mexico and Canada have lost or settled five each under Nafta…In the largest award to date, Icsid…ordered Ecuador to pay $1.77 billion to Occidental Petroleum for canceling its contract with the corporation. And…Venezuela to pay $1.6 billion to Exxon to compensate for nationalizing oil projects. Nearly 200 disputes are pending at Icsid alone…In 2012, the Swedish energy company Vattenfall sued at Icsid following Germany’s decision to phase out nuclear energy…For El Salvador, a $301 million loss…would significantly reduce funds available for health care and education…Venezuela, Ecuador and Bolivia have officially denounced the Icsid convention…