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Australian mining company gets involved in conflictive project in El Salvador.

By Vladimir Pacheco, (published on this website 4-11-2013)

Scars of civil war still fresh in the country’s social landscape.

After years of civil war El Salvador remains a fragile country both politically and economically. With a geographical territory a third the size of Tasmania, a population of 6.2 million and scare water resources, the country struggles to provide a decent livelihood for all of its citizens. Since the end of the civil war in 1992, successive governments of this small Central American nation have sought to industrialise the country by opening up the economy and encouraging foreign investment. Even though mining has not featured strongly in El Salvador’s economic history, mining companies have taken advantage of the country’s relaxed foreign investment rules to start exploration activities. Since the early 2000 as many as 10 transnational mining corporations are prospecting for gold and other precious minerals buried under the northern mountains which provide the main source of clean water, fresh air and local agricultural production for the country.

As gold mining corporations have lobbied to introduce a legal and logistical framework to set up industrial scale open pit mines through the northern region, they have met highly organised opposition from communities, civil society and church organizations that have repeatedly raised concerns over the use of excessive amounts of water, environmental degradation, public health impacts, as well as the social division that these projects may cause in a densely populated and politically polarised country with one of the highest levels of vulnerability to natural disasters.  This fight in defense of a sustainable environment has been led by a highly organised movement of civil society organizations convened under the National Roundtable Against Metallic Mining, as known as “La Mesa”.

 La Mesa has conducted a successful national and international campaign to stop mining in the country. For instance, in early 2009, the government of the rightist Antonio Saca acceded to public pressure and stopped issuing mining exploration and exploitation permits. The current leftist government of Mauricio Funes has maintained the moratorium. In the meantime La Mesa has tabled a bill in the National Assembly that will ban metallic mining in the country but with the presidential election to take place in March 2014, the bill, in most likelihood, will not be debated until after the election result is known.  

Corporate response.

In response to the moratorium Pacific Rim, a company recently acquired by OceanaGold, sued the government of El Salvador for over US $77 million at the International Centre for Settlement of Investment Disputes (ICSID), under an investor state clause in the Central America Free Trade agreement with the US, CAFTA-DR. After the case under the ICSID was thrown out of court, Pacific Rim re-launched its law suit against el Salvador under local investment laws, and increased its demand to US $315 million. A veredict is expected in February, 2014.


Even though Pacific Rim was unsuccessful before the ICSID, this episode should raise alarm bells here as the federal government considers submitting Australia to a similar type of clause in its Trans-Pacific Partnership agreement. The clause would give many multi-national companies the right to sue Australian governments at international trade tribunals, such as ICSID, if Australian regulations interfere with their operations.


Mining in El Salvador leads to social conflict and water scarcity.

Pacific Rim Mining is not only demanding the lion’s share of the law suit but is also causing tremendous social division in the community of San Isidro, where its operations are located. At least seven environmentalists have died since 2009 as a direct result of the mine’s presence.  Intimidation and attacks of community leaders and their organisations continue to be a common occurrence and many environmental activists, are currently under death threats. Allegations of a corrupt relationship between company officials and local authorities such as the mayor’s office, the police and the local courts are rampant. 


At the heart of Pacific Rim’s attempt to interfere with an elected government’s decision to listen to its people is the control over water resources. The cyanide-leach processes at the company’’s El Dorado mine use approximately 900,000 litres of water a day. In comparison, it would take 30 years for an average Salvadorean family to use that amount of water. Despite industry assurances that water is reused for such processes, the contamination of water continues. In 2012, the Salvadoran Ministry of the Environment found that the San Sebastian River had nine times the acceptable limit of cyanide and one thousand times the Salvadoran standard for lead in potable water. The stakes are so high in El Salvador that the issue of access to clean water has seen seven environmental activists die since 2009.

La Mesa’s Australia campaign

La Mesa is an inspiring force in the resistance against the devastating impacts of resource extractive industries and ongoing human rights abuses in El Salvador. However the struggle is far from over. Because most mining investment in El Salvador originates in North America, La Mesa’s anti-mining campaigns have traditionally drawn their support from people and organisations based in the US and Canada. This will certainly change now that OceanaGold, a Melbourne based mining company, is a majority share holder of Pacific Rim stock thus becoming a source of funds to help “move forward” Pacific Rim’s lawsuit against El Salvador.


To raise awareness of the problems associated with resource extraction in El Salvador and to encourage individuals to join our campaigns here in Australia, La Mesa, organised a very successful fact finding mission in April this year. To put international pressure on OceanaGold to withdraw its lawsuit against El Salvador and to build a stronger support base in Australia, a representative from La Mesa will tour Australia in mid-November. Vidalina Morales, community leader from San Isidro, will visit Sydney, Melbourne, Perth, Canberra and Brisbane. She will meet with Australian civil society organisations and attend a protest at OceanaGold offices.


With the slogan of “Water Not Gold,” Vidalina’s tour will show how grassroots movements can become vital actors in protecting our sovereignty, demanding better corporate accountability and ensuring the future of our water within Australia and beyond.


More details about the tour can be found on this page: https://www.facebook.com/WaterNotGold

Some relevant links:


http://www.zcommunications.org/resisting-cafta-and-metal-mining-in-el-salvador- by-leah-wilson

 http://www.theguardian.com/global-development/poverty-matters/ 2013/jun/10/el-salvador-mining-ban-watersecurity?INTCMP=SRCH

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