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LatinNews Daily Report - 07 June 2012
OAS summit: no surprises
El Salvador: On 31 May the World Bank arbitration panel, the International Centre for Settlement of Investment Disputes (ICSID), ruled that the Canadian mining company Pacific Rim cannot sue El Salvador for damages under the US-Central America-Dominican Republic Free Trade Agreement (Cafta-DR). Since Canada is not part of Cafta-DR, Pacific Rim filed its complaint through a US subsidiary; however, according to a press release issued by Pacific Rim, “the Tribunal concluded that the specific subsidiary that filed the claim does not have sufficiently ‘substantial’ business activities in the US to allow the investment protections under CAFTA.” The lawsuit will instead proceed under El Salvador's Investment Law, which prohibits expropriation without compensation, and will be overseen by the ICSID. According to the company’s website, “through its US and Salvadoran subsidiaries, Pacific Rim invested tens of millions of dollars into the El Dorado project since 2002, identifying an initial resource in excess of 1.4m ounces of gold”. However, the company is seeking millions of dollars in damages from the Salvadoran government for failing to issue the permits needed to open the project.
