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The Fight to Keep Toxic Mining—and the World Bank—Out of El Salvador September 24, 2014

Posted by rogerhollander in El Salvador, Environment, Latin America, Water.
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Roger’s note: Free trade agreements between North American industrialized nations and third world Latin American nations are inherently unequal and designed to promote and protect mega-corporate interests.  Specifically, they enshrine in law the right to capital investment regardless of damaging effects to workers and to the environment.  Corporate and military interests on both sides of the “partnership” use their clout over (ownership of?) the respective governments to enter into these legally binding agreements.  The NAFTA agreement between the U.S., Canada and Mexico has had the effect of destroying small corn farming in Mexico,which is in part responsible for the massive migration of Mexicans to the U.S.  Cf. my 2003 article in the L.A. Times:  http://articles.latimes.com/2003/nov/20/opinion/oe-hollander20

 

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Hundreds of protesters recently gathered at the World Bank to shame a gold mining firm’s shakedown of one of Central America’s poorest countries.

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Complete with a giant inflatable fat cat, protesters rally outside the World Bank in support of El Salvador’s right to ban toxic mining along its principal watershed. (Photo: Ron Carver / Institute for Policy Studies)

For miners, investors, and artisans, few things are more precious than gold. But for human life itself, nothing is more precious than water.

Just ask the people of El Salvador.

Nearly 30 years ago, the Wisconsin-based Commerce Group Corp purchased a gold mine near the San Sebastian River in El Salvador and contaminated the water. Now, according to Lita Trejo, a native Salvadoran and school worker in Washington, DC, the once clear river is orange. The people who drink from the arsenic-polluted river, she says, are suffering from kidney failure and other diseases.

On September 15, Trejo and more than 200 protestors—including Salvadoran immigrants, Catholic priests, trade unionists, and environmentalists—gathered in front of the World Bank to support El Salvador’s right to keep its largest river from suffering the same fate as the San Sebastian River. The event was co-sponsored by a raft of organizations, including the Institute for Policy Studies, Oxfam America, the AFL-CIO, the Teamsters, Friends of the Earth, the Sierra Club, and the Council of Canadians, among others. Over the past few weeks, similar protests have taken place in El Salvador, Canada, and Australia.

Mining for gold is not nearly so neat and clean as the harmless panning many Americans learned about as kids. Speakers pointed out that gold mining firms use the toxic chemical cyanide to separate gold from the surrounding rock, which then leaches into the water and the soil. And they use large quantities of water in the mining process—a major problem for El Salvador in particular, which has been described as “the most water-stressed country in Central America.” Confronted by a massive anti-mining movement in the country, three successive Salvadoran administrations have refused to approve new gold mining operations.

That’s where the story should end. But it’s far from over.

An Australian-Canadian mining company, OceanaGold, is suing the Salvadoran government for refusing to grant it a gold-mining permit to its subsidiary, Pacific Rim. Manuel Pérez-Rocha, a researcher at the Institute for Policy Studies, explained the situation: “Oceana Gold is demanding more than $300 million from El Salvador. They are saying, ‘If you do not let us operate in your country the way we want, you must pay us for the profits that you prevented us from making.’”

That sounds absurd, but it’s true: The company is claiming that under the Central American Free Trade Agreement, it has the right to sue the Salvadoran government for passing a law that threatens its bottom line.

El Salvador is now defending its decision to prevent Oceana Gold/Pacific Rim from operating the “El Dorado” mine near the Lempa River before the International Center for Settlement of Investment Disputes, a little-known World Bank-based tribunal.

As several protesters pointed out, El Salvador’s decision is grounded in its need to protect its limited water supply. More than 90 percent of the surface water supply in El Salvador is already contaminated, and more than 50 percent of the country’s 6.3 million people depend on the Lempa River watershed for their water.

Francisco Ramirez, a Salvadoran who grew up in Cabañas, the region where the El Dorado mine would operate, spoke from experience about this reality. “If you look at the contaminated rivers in El Salvador, there are no fish left in the water. Not even toads, which are usually resistant to certain levels of contamination, can survive. We do not want that contamination to spread,” Ramirez proclaimed.

Ana Machado, a Salvadoran member of the immigrant rights group Casa de Maryland, another co-sponsor of the event, added: “The Lempa River is the main drinking source and an important source of livelihood for a majority of people in my country, including my family. They fish there. They clean their clothes there. If the company contaminates the river, Salvadoran life as we know it will end.”

Another Salvadorian immigrant and organizer with Casa de Virginia, Lindolfo Carballo, linked this lawsuit to larger struggles over sovereignty and immigrant rights. “This country created institutions to legally rob its Southern neighbor,” he said, referring to the “free-trade” provisions that permit corporations to sue governments over public safety regulations they don’t like. “And after they rob us of our natural resources, after they contaminate our water and land, they tell us that we are undocumented, that we are ‘illegals,’ and that we have no right to be in this country. They have no right to throw us out of the United States if they are robbing us of the resources we need to survive in our own country,” he alleged.

John Cavanagh, Director of the Institute for Policy Studies, explained the goal of the protest: “We are saying to OceanaGold: ‘Drop the suit. Go home.’ To the World Bank, we say: ‘Evict this unjust tribunal. It deepens poverty and stomps on democracy and basic rights.’” Cavanagh pledged to continue pressing the company to back down, promising that protesters would return to the World Bank in larger numbers when the tribunal makes its ruling in 2015.

Diana Anahi Torres-Valverde is the New Mexico Fellow at the Institute for Policy Studiesin Washington, DC.

Free Trade May Not be Fair Trade: The Pacts are Always Biased Toward the Economically Stronger Nations August 26, 2008

Posted by rogerhollander in Free Trade, Political Essays (Roger).
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 (I had been asked by its organizers to try to arrange for Canadian representatives to the “Hemispheric Conference of Parliamentarians” that took place in Quito in 2002.  The subject of the conference was free trade and the impact it would have on Latin American countries.  I spoke by phone with the offices of several Canadian New Democratic Party (N.D.P.) MPs, without success.  Not being a member of any parliament myself, I was therefore invited by the organizers to be an official observer of the Conference.

 

There were members of parliaments from most Latin American Countries in attendance, including supporters of the Chávez government in Venezuela and oppositionist Senators from embattled Colombia.  Meeting them and hearing their opinions was what I found most interesting.  I was put up at a small hotel with some of the other attendees, and I had lunch with the executive assistant of an Ecuadorian congressman whose name was, no kidding, Fidel Castro.

 

Several months later I was in Los Angeles studying much of the material I had brought back from the Conference and thinking about what I had learned.  The article that follows, which was published as an opinion piece in the “Los Angeles Times,” November 20, 2003, was a result of this experience.  It was picked up and reproduced by a number of Internet web sites – including a porno [!] site which I suppose must have only seen and misunderstood the word “trade.”)

 

By taking a look at how free trade works, we can see why virtually every labor, ecological and anti-poverty organization in Latin America is strongly opposed to the proposed Free Trade Area of the Americas, which is the subject of this week’s Miami gathering of trade ministers from Western Hemisphere nations.

 

The critics see thing this way: Let’s say that the Newcastle mining industry in Britain can produce a ton of coal at the cost of $10, which it sells on the domestic market.  The industry thrives.  At the same time, coal mining in Pennsylvania is just as efficient, but with transportation and British import tariffs the cost to export coal to Britain would be $15 a ton.  No deal.  But the Pennsylvania mining interests, desperate for export markets, have powerful lobbyists in Congress, which in turn enacts the “Coal Law,” providing a government subsidy of $5 a ton.  Further, with a free-trade agreement between the U.S. and Britain abolishing the $2-a-ton tariff, there would be a net gain of $7 a ton for the Pennsylvania mining industry.  Now its actual – if artificial – cost of production is $8 an exported ton, $2 cheaper than the $10-a-ton Newcastle coal.  Voila!  Coals to Newcastle.  Goodbye Newcastle mining industry.  Hello massive British unemployment.

 

The logic is simple.  There are two ways to “protect” local industry: import tariffs and export subsidies.

 

Free trade eliminates tariffs, giving the economic advantage not only to those producers that are more efficient production-wise (largely because they are more capitalized) but also to those industries blessed with governments capable of delivering massive subsidies.  In other words, to the already industrial and wealthy nations.

 

Coal miners in Newcastle may not have to worry about my hypothetical example, but corn growers in Mexico have every reason to panic.

 

Grains are to Mexico as coal was to Newcastle.  Since the initiation of the North American Free Trade Agreement among the U.S., Canada and Mexico in 1994, the earnings of Mexican growers of corn, wheat and rice, along with beans, have plummeted, while the cost to the Mexican consumer has risen by 257%.

 

Mexico, the land where corn was first domesticated centuries ago, is now importing “cheap” subsidized U.S. agribusiness corn.  Coals to Newcastle indeed.

 

With a dramatic difference in industrialization (70 U.S. tractors, for example, for every Mexican tractor) and the powerful agricultural lobby in Washington maintaining enormous subsidies, it is no wonder that Mexican farmers cannot compete once the protective tariffs are eliminated.

 

In theory, free trade should make everyone more competitive, replacing the inefficient with the efficient.  The idea is that everyone should do what they are best at and purchase from their neighboring countries what those countries do best.  Everyone gains.

 

In theory.

 

In reality, for historical and geopolitical reasons, what Third World countries are “best at” is having their natural resources extracted and exported to the industrialized nations (which in turn sell back manufactured products at high cost) and having their populations exploited for cheap labor.

 

Advocates of free trade – the already developed industrialized nations and those in the Third World countries who do their bidding – argue in the abstract, taking advantage of words with positive connotations such as “free” and “trade.”  In the real world, however, economics is not a matter of ideology but rather of production and markets and the intervention of government. Bilateral agreement between unequal partners are inherently biased in favor of the stronger – and the greater the disparity, the greater the bias.

 

This is exactly the situation that exists between the U.S. and Latin American Republics.

 

The World Trade Organization treaties and the proposed Free Trade Area of the Americas are characterized by undemocratic processes, such as secret and semi-secret pre-agreements and unrealistic deadlines, and economic blackmail including threats to withhold the International Monetary Fund and World Bank funding upon which the weaker nations’ governments have become dependent.  Rapidly expanding U.S. military presence worldwide only serves to reinforce the economic hegemony.

 

The impoverished nations of the Western Hemisphere have much to fear from the proposed trade agreement.

 

 

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