Historic Wins for Democracy and Rights in El Salvador

Recently there have been two giant wins for democracy, human rights, and the environment in an unlikely spot: the small, embattled nation of El Salvador.

The most recent win was in March 2017, when the national legislature voted overwhelmingly to make El Salvador the first nation on earth to ban all metals mining, an activity that threatened that nation’s water supply. Who could have imagined an editorial in the New York Times entitled “El Salvador’s Historic Mining Ban” on April 2, 2017?¹ The other win occurred six months earlier, in October 2016: After a seven-year battle, a World Bank Group-affiliated arbitration tribunal ruled unanimously against a global mining firm that sued El Salvador for not granting it a mining license.² Global corporations have been winning most of the lawsuits in these so-called “investor-state” tribunals, but here again El Salvador prevailed.

How? Why? What lessons can be learned, and can nations and activists build on these two victories?

A Movement for Democracy, Human Rights, and the Environment

First, a bit of background. A band of gold runs through the mountains of Mexico and Central America, which has enriched foreign corporations and domestic elites for hundreds of years. The gold veins run through the north of El Salvador, right through the Lempa River watershed, which provides fresh water to over half the country’s population. The peril of gold mining is multi-fold: industrial mining requires cyanide to separate the gold from the surrounding rock, and toxic substances such as arsenic and sulfides get released in the process and can contaminate soils and water for centuries. As a result, there is no way to conduct industrial mining that is completely safe. For this reason, many scientists are concluding that in certain countries and areas, mining should be prohibited.³ El Salvador is one such place.

Global mining firms, most now headquartered in Canada and Australia, flooded into Central America and other countries in the early 2000s as mineral prices skyrocketed. Communities in the north of El Salvador were initially receptive to the corporate promises of jobs and revenues, but then a number of people visited large-scale mines just across the border in Honduras and returned home with horrifying tales of polluted water, health ailments, and rising conflict in the communities around the mines.⁴

Community groups linked together across El Salvador and found allies in the Catholic Church and in groups in the capital city of San Salvador that worked on human rights and development. They launched a coalition, the National Roundtable on Metals Mining, in 2005.⁵ Their petitions, protests, murals, and press conferences spread education about the precarious situation that mining posed to El Salvador’s already-fragile water supplies. By 2007, a University of Central America poll revealed that close to two-thirds of the population opposed industrial mining.⁶

Then came the first unexpected good news: The environment minister and other individuals in the then-conservative government of President Tony Saca listened to the communities and convinced the executive branch to halt new mining licenses until the country could conduct a country-wide economic and environmental assessment of mining’s impact.⁷ Furious about this de facto ban on mining, a firm called Pac Rim Cayman launched a lawsuit against El Salvador under the investment provisions of the Central America Free Trade Agreement and El Salvador’s investment law, seeking over $300 million to recover its costs and what it calculated as lost profits from potential future mining.⁸

While this was just one of dozens of lawsuits brought by global corporations against governments in this period, it attracted the attention of civil society groups in the United States, Canada, Australia, and elsewhere because of the size of the lawsuit, and because of the huge challenge it posed to democracy, environmental rights, and sovereignty in this small nation.⁹

Groups such as the Institute for Policy Studies, MiningWatch Canada, Friends of the Earth, Oxfam, and others created a network called “International Allies” and began protests outside the World Bank to raise attention to the injustice of the lawsuit while providing “research accompaniment” and media outreach on both Pac Rim and the lawsuit.¹⁰

One of the remarkable biases of this system of investor rules, strengthened by three decades of trade and investment agreements among nations, is that environmental and human rights have no standing.¹¹ Further, domestic courts in El Salvador played no role; the company brought its claim directly to Washington, D.C. And, after an initial stage, the proceedings and rulings were made in secret, with no public disclosure (except that posted by the Salvadoran government) until the final ruling was released in October 2016.

The Final Showdown

Flash forward seven years, after four community leaders were brutally killed in northern El Salvador, and after countless marches, protests, petitions, testimonies, reports on the impact of mining, and study trips and delegations. Finally, after seven years of deliberations at the International Centre for Settlement of Investment Disputes (ICSID), created in 1966 as part of the World Bank Group—and after over $12 million spent on legal fees by El Salvador—the three-person panel of arbitrators neared their decision in the summer of 2016.

We also learned that in the final months, the mining company (now OceanaGold, the Canadian/Australian company that purchased Pac Rim Cayman and thus its lawsuit against El Salvador) attempted to make a deal with certain members of the Salvadoran government to let it mine in exchange for dropping the suit.¹² But with the president and key ministers, such as the Minister of Environment, remaining firm, the government stood strong; and due to the weakness of OceanaGold’s case, the strength of El Salvador’s legal defense, and the constant pressure by the National Roundtable and its International Allies (and their combined media successes both globally and locally in El Salvador), the tribunal ruled that OceanaGold’s suit had no merit.¹³ Again, this was unexpected given the well-documented pro-corporate biases of the tribunal.

This loss for OceanaGold set in motion the second victory. OceanaGold responded to its ICSID loss with arrogance and contempt. It did not pay the $8 million in fees that the tribunal ruled it should pay, and it publicly denounced El Salvador’s refusal to let it mine. Further, OceanaGold increased its propaganda campaign about its “responsible mining,” while continuing to try to woo key individual government officials at very high levels.

OceanaGold’s behavior provided momentum to movements in El Salvador, which used the moment to push for what had been their larger goal for twelve years: a legislative ban on metals mining. As part of this effort, the Catholic Church heightened its visible opposition to mining. Civil society opponents to mining even brought a governor from the Philippines to El Salvador to bear witness to OceanaGold’s irresponsible mining in his province and publicly to discredit the company’s claims of “responsible mining” there.¹⁴On March 29, 2017, members of the Legislative Assembly—some sitting at desks adorned by civil society’s bright yellow “No a la Mineria” banners—unanimously passed the historic ban.

Some Lessons Learned

Why these two victories in a world where the rich and powerful have written rules that largely serve them at the expense of democracy and human rights? A few thoughts from our vantage point as public scholars who have researched this fight, who have “accompanied” groups in El Salvador for the past eight years, and who are also founding members of International Allies.

First, the communities in northern El Salvador at the center of these fights led with powerful and scientifically-backed stories and voices. They built their fight as frontline human rights defenders, who were valuing water over gold. They placed the long-term environmental health and survival of their nation over short-term economic returns. This fight for water and for rights attracted the moral voice of the Catholic Church (which happened to be headed by a chemist who understood the environmental dangers of cyanide), and convinced the majority of people that “water is life.” Different parts of the movement were willing to work with a variety of allies in both the legislative and executive branches of government (and vice-versa), and they were backed by a well-organized set of international allies.

It helped that there was not a strong domestic business lobby for mining.¹⁵ It helped that the corporation was arrogant and made mistakes. It helped that El Salvador’s Human Rights Ombudsman embraced environmental rights as human rights, and stood up for the communities after several anti-mining supporters were assassinated as early as 2009. And it helped that international allies, in addition to the pressure of their protests, garnered enormous international press attention to the fight.

Putting this in a broader context, the El Salvador wins are part of two larger and overlapping movements for human rights and the environment. One is the movement to ban environmentally-destructive mining, which in recent years has won restrictions on mining in Argentina, Colombia, Costa Rica, Panama, and the Philippines, among other countries.¹⁶ The second is the movement to reform the biased investor-state dispute settlement institutions, such as the World Bank Group’s International Centre for Settlement of Investment Disputes, so that a country’s sovereignty is respected, and so that environmental, indigenous, and other human rights have at least equal standing to (if not priority over) so-called “corporate rights.” Some larger countries, such as Brazil, have never joined this tribunal system, and others are withdrawing or reviewing their participation, including Bolivia, Ecuador, India, Indonesia, and South Africa.

The moral of El Salvador’s double win is that the powerful do not always triumph. As such, El Salvador’s two victories deserve a much larger audience.

Robin Broad is Professor of International Development, School of International Service, American University (Washington, D.C.) where she is also affiliated with the Center for Latin American and Latino Studies. She is a 2017-2018 John Simon Guggenheim Fellow.

John Cavanagh is the director of the Washington, DC-based Institute for Policy Studies. He is the co-author of 12 books, most recently with Robin Broad, of Development Redefined: How the Market Met Its Match.