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Canadian Gold Company Sues El Salvador for $100 Million

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Canadian mining company, Pacific Rim, is in court suing the government of El Salvador for 100 million dollars. It claims that by not awarding the company an exploitation permit for its proposed gold mine, the tiny country is in breach of the Central American Free Trade Agreement (known as CAFTA). Canada is not a signatory to the trade agreement, so the Vancouver-based company is filing the suit through it's US subsidiary, Pac Rim Cayman, which it moved from the Cayman Islands to Nevada in December 2007.

In the slim coverage that has come out around the case, few have attempted to answer the question as to how the case got this far? How did the dispute travel from the hills of Northern El Salvador to the halls of Washington, DC?

One year ago today, teacher Marcelo Rivera disappeared. His body was found two weeks later at the bottom of a well, miles away from his home in the town of San Isidro. His body was found with clear signs of torture, such as missing fingernails. San Isidro is also home to Pacific Rim's flagship property, El Dorado, which the company has been fighting to open for years. Rivera was a key leader in the grassroots anti-mining movement that has stood in the way of that mine.

Why did so many of the people of San Isidro oppose the Canadian mine? Ask Marcelo Rivera's brother Miguel, who was in Washington, DC last month for the start of the CAFTA hearing at the World Bank. He's not allowed to participate in the trial, nor even sit in on it, despite knowing the case better than any of the DC-based lawyers in the room.

While in DC Miguel goes from meeting, to interview, to press conference, being asked to provide details on the various ways he and his community feel they have been affected by the proposed mine. He tells of radio journalists receiving death threats, a priest attacked while driving his car, mayors admitting they accepted money from the company. The stories are endless.

Miguel describes the gold mining process including the use of cyanide, release of heavy metals like arsenic and mercury, loss of water access - El Salvador is already tied with Haiti for the least access to potable water in the hemisphere. He tells of how he and his brother decided to oppose the project after a trip to a gold mine in neighboring Honduras. He talks of the horrific skin defects he saw on the babies in Honduras' Siria Valley.

Why isn't San Isidro's mine open today? How did a community of poor farmers create a movement with enough support that it pressured the government of El Salvador to refuse to permit Pacific Rim's mining operation?

Miguel speaks of Wilfred Lainez. A hip-hop artist known as MC Lethal, Lainez is legally blind from untreated glaucoma. He has captured the energy of San Isidro's youth with his rhymes about the dangers of mining and other social issues in the community.

Miguel chuckles as he tells of the time Pacific Rim sponsored a soccer tournament in the community. Marcelo, Miguel, and others put in a team wearing jerseys that said "No to Mining" on the back. Much to the company's chagrin, the team won the tournament, thereby ruining the company's planned photo-op with the winners.

He talks proudly of the mural painted by local youths at one of San Isidro's highway entrances. It depicts a bulldozer with a Canadian flag looking over a post-mining apocalypse of dead trees and dry rivers. On the other side is a farmer leaving town with his emaciated cow and a businessman counting his gold bricks. The farmer is presumably headed to the overcrowded city, or to work in the United States or Canada.

It must be noted that Pacific Rim has never been directly linked to the murder of Marcelo Rivera, or the two other anti-Pacific Rim activists who were killed in 2009. Pacific Rim has stated they had no involvement of any kind in the murders. Ramiro Rivera (no relation), declared in an interview with The Real News in May of 2008 that he expected to be killed for his opposition to mining, and that he was already receiving death threats. He survived 8 shots in the back in August 2009. In December he was shot dead while under police protection. Ramiro told us in 2008 that the violence was a result of the money Pacific Rim pumped into communities. He accused the company of hiring his friends and family as promoters, and buying-off mayors and police. The other activist murdered was Dora Sorto Recinos, she was 8-months pregnant at the time she was shot dead. She was killed one year and a half after her husband Santos lost two fingers in a machete attack at the hands of a neighbour who had been hired to promote Pacific Rim.

But Ramiro and Dora were more than victims they were active participants. Before their murders, they helped organize three road blockades that successfully stopped company drilling equipment from entering their region.

With meager resources, El Salvador's anti-mining activists pressured not one, but two Salvadoran presidents to refuse Pacific Rim's permits. Now they find themselves continuing their battle in Washington, fighting a "free trade" agreement that allows an international corporation to punish their country for taking a stand in defense of its people.

Will Pacific Rim be successful in using the World Bank trial to punish El Salvador, collecting 100 million dollars? The public health system in El Salvador runs just over 350 million dollars annually, by far the largest single item in the budget.

Will the Canadian government hide behind the myth of Canada the righteous global citizen, or will it take on the actuality of the global abuses of the Canadian mining industry? Sixty percent of the world's mining companies are registered in Canada, yet there is not a single Canadian law regulating their activities abroad.

This blog was written together with my colleague at TRNN, Jesse Freeston. You can watch Jesse's report on the Pacific Rim controversy here.