Few regular readers of Tribune are likely to be familiar with the politics of the small central American country of El Salvador. You may have heard something of its eccentric new president, Nayib Bukele, who introduced Bitcoin as a national currency, and whose flagship policy is the construction of a massive new prison which will have the lowest square meterage per inmate of any prison in the world. But years before President Bukele was elected, El Salvador was home to a dramatic David and Goliath battle between a group of local activists and a huge multinational mining corporation.
In 2017, a group of campaigners persuaded the government to ban gold mining – and all metal mining – across the country. The ban was considered a major environmental victory, but the mining companies that stood to lose out weren’t happy, and one, Pacific Rim, launched an Investor-State Dispute Settlement (ISDS) case against El Salvador the same year.
ISDSs allow private corporations to sue governments for implementing legislation that harms their profits. These provisions have been written into a wide range of bilateral investment treaties (BITs), which have been pioneered by countries like the US and the UK allegedly in order to increase investment between the rich and poor world. Thousands of ISDS cases have been launched in recent years, and UNCTAD estimates that there are at least 350 more ongoing.
Concluded cases include oil giant Chevron’s case against the government of Ecuador, launched after Ecuador attempted to force Chevron to clean up after an oil spill the company had caused in the Ecuadorian rainforest. The spill was so devastating that it was referred to as the ‘Amazon’s Chernobyl’ and Ecuadorean courts ordered Chevron to pay billions in damages. But Chevron’s ISDS case allowed it to avoid paying any damages and forced the country to cover the company’s legal fees.
Other examples abound. In Canada, a chemicals company sued the Canadian government when it attempted to introduce legislation banning a toxic substance. The government was forced to withdraw the ban and pay damages to the company. In Mexico, a waste disposal company successfully sued the government when it attempted to prevent the company from building a facility as a result of health and environmental concerns. And then there’s the astonishing story of the group of billionaires suing the Honduran government for revoking their right to build a crypto-libertarian paradise in the Caribbean Sea.
A cursory look over the history of ISDS rulings shows them to be grossly biased in favour of large corporations. In fact, the system has become so obviously rigged in favour of big business that even the Economist has questioned the wisdom of the ISDS, writing:
‘If you wanted to convince the public that international trade agreements are a way to let multinational companies get rich at the expense of ordinary people, this is what you would do: give foreign firms a special right to apply to a secretive tribunal of highly paid corporate lawyers for compensation whenever a government passes a law to, say, discourage smoking, protect the environment or prevent a nuclear catastrophe. Yet that is precisely what thousands of trade and investment treaties over the past half century have done.’
The significance of Pacific Rim vs El Salvador is that it was one of a tiny number of cases in which a poor country actually won, as Robin Broad and John Cavanagh document in their incredible 2022 book The Water Defenders. An international court ruled against the claim of Pacific Rim (which had by that point been acquired by Oceana Gold) that it was unfairly refused permission to commence mining operations in El Salvador.
One factor that contributed to the ruling was the strength of Salvadorean civil society. Human rights and environmental activists had spent decades campaigning to prevent gold mining, on the basis that similar operations had led to the introduction of the toxic chemicals into local water supplies, leading to severe health issues – from kidney failure, to cancer, to nervous system disorders.
After Pacific Rim launched its ISDS claim, the campaigners – later dubbed the water defenders – sprung into action, mobilising Salvadorean civil society against the mining giant. Broad and Cavanagh’s book describes the terrifying and bloody ordeal that took place over the course of subsequent years as Pacific Rim, armies of corporate lawyers, and hired thugs tried, and failed, to terrorise the water defenders into submission.
But now President Bukele, who is firmly aligned with the interests of big business, has reopened the battle by arresting five of the water defenders on trumped-up charges.
The Next Battle
When the crypto bubble burst, Bukele found himself in desperate need of new ways to raise revenues, and is reportedly considering overturning the mining ban. To do so, he needs to neutralize the threat posed by the water defenders.
Bukele’s popularity rests on his battle against the horrific gang violence that has plagued the country ever since its brutal civil war, which only came to an end in the 1990s. As the conflict raged, many Salvadoreans fled to the US, particularly to LA, where some formed gangs. Thanks to a change in US immigration law, as the war ended Salvadoreans were deported en masse to El Salvador, and the gangs that had been formed in LA were transported with them.
The result was a catastrophic breakdown in law and order, with ordinary citizens paying the price. El Salvador became a country with one of the highest murder rates in the world, alongside extremely high levels of sexual violence, extortion, and trafficking.
Bukele has managed to reduce everyday levels of violence in the country – an achievement for which many Salvadoreans are understandably grateful. But some point to the fact that crime rates were already falling before Bukele came to power, and argue that previous crackdowns have ended in failure because they have failed to tackle the poverty and structural violence that push people towards violence in the first place.
Bukele, who dubbed himself ‘the coolest dictator in the world’, has used the war on the gangs for his own ends: to criminalise human rights activists and political opponents, certain that no one will complain about his heavy-handedness as long as the violence comes to an end.
The water defenders are just some of many innocent casualties of Bukele’s crackdown. They stand accused of being members of the FMLN, and of having kidnapped and murdered a young woman during the civil war. Yet the evidence against them is all but nonexistent, and most of those accused have strong alibis.
Two of those arrested hold senior positions in one of the most effective anti-mining organizations in the country, the Association for Social and Economic Development of Santa Marta (ADES). A former colleague of two of the accused, Marcelo Rivera, was murdered during his work as a water defender. The ultimate perpetrators of the crime have never been brought to justice.
Since their arrest, 185 academics and lawyers from 21 countries have signed an open letter to the Attorney General of El Salvador requesting him to drop the case against the water defenders. These experts have brought compelling evidence that the case brought against the five was ‘unsubstantiated’ and ‘politically motivated’, as well as expressing ‘grave concern about the criminalisation of environmentalists, the systematic violation of human rights, and the flagrant undermining of democracy in El Salvador perpetrated under the ongoing State of Exception.’
Meanwhile, ADES activists have collected evidence showing that local farmers are being approached in areas of mining interest and offered ‘multi-year leases for large quantities of land’.
Salvadorean campaigners are literally putting their lives on the line to keep their communities safe from predation by massive multinational corporations seeking to exploit their country’s natural resources, aided and abetted by a ruthless neoliberal dictator. As the world moves away from fossil fuels, these kinds of conflicts will be seen in many more regions of the world. Campaigners everywhere can learn from the strength and courage of the water defenders.