By Jen Moore and Maude Barlow
Even before former guerrilla commander Salvador Sánchez Cerén
is inaugurated as President of El Salvador, his administration
is saddled with an unnecessary $301-million liability — a
lawsuit over El Salvador’s refusal to allow an
environmentally perilous gold mine to be built.
It is a legacy that has already cost the Salvadoran government
some $5 million in legal costs — money that the impoverished
nation could have spent on education, health care, disaster
relief, you name it.
The lawsuit, before the World Bank’s International Centre for
the Settlement of Arbitration Disputes (ICSID), should have
ended in late 2013 with the imminent bankruptcy of Pacific Rim
Mining, the Vancouver-based firm that has been trying to get at
a gold deposit in the department of Cabañas for over a decade,
and which had no other active mining project to sustain its
What benefit OceanaGold’s management saw in this ill-advised
move is anyone’s guess, besides trying to further punish the
people of El Salvador for having successfully convinced three
successive government administrations that mining is not in the
water-strapped country’s best interest.
Certainly, when we look at the facts about Pacific Rim’s
operations in El Salvador, as we have just done in a jointly
report released today, there is not much going for this
company or its “El Dorado” project. The company never fulfilled
the requirements to get a mining permit to put the project into
production and has encountered considerable opposition almost
from day one that shows no evidence of going away. On the
contrary, Pacific Rim’s behaviour has helped make stopping gold
mining a national issue — and an international concern.
But maybe it was because OceanaGold shared a Director with
Pacific Rim Mining who was looking for a favour and convinced
it that a lowball $10-million bailout now would turn into a
healthy profit with a win at ICSID or a more favourable win at
the polls in El Salvador’s recent elections.
Whatever OceanaGold was thinking in October when it announced
that it would purchase Pacific Rim Mining, it should think
again, cut its losses and drop the suit.