Milwaukee County Labor Council AFL-CIO

August 2, 2014

In The News

US trade deals mine greed not gold

By Dominique Paul Noth
Editor, Labor Press
Posted June 8, 2012


Wisconsin’s myriad issues with businesses controlling mining legislation may not yet make the state a replica of El Salvador. But citizens should go to bed every night praying we never get there and fearful when they learn how, just this month, the World Bank tribunal brought that payout fever into sharper view.

Travel first to Central America and lovely parts of El Salvador – that visually alluring land now impoverished and socially crippled even as a young democratic government steps in to try to fix things after decades of political turmoil and civil war.

You thought Wisconsin had dissension! Let’s hope we never get close to that sort of disaster, brought on not just by ideological conflict but spurred by corporate greed, much as happened here. We avoided one such excess from the governor who survived June 5 – he was blocked from turning over to big feverish greed the keys to our mineral kingdom, stopped by, of all people, a moderate in his own party who didn’t believe in ecological corner-cutting.

One of Morrrill's photos of what is left of a stream choked by mine runoff.

Forces of blind profit were and still are culpable in the Salvadoran debacle. Political dissension made it easer for speculators to exploit the citizens – a warning for our own future.

Jan Morrill, a Maine native, now lives in El Salvador and regularly visits the river and town of San Sebastian. Much of her time is spent researching and recording the devastating environment and medical aftermath of the gold mining operation from the early 1900s until the mine was shut down by the new government in 2006 for pollution and disease-causing reasons. Just look at her pictures.

Her photos of the discolored muddy rivulets that look like toxic yellow reddish muck have gotten wide exposure in the environmental community. They make frighteningly vivid what happens when big business leaves behind arsenic, acidity and chemicals, indifferent to the 20,000 people who live near the San Sebastian River basin.

Did the owners of the mine for so many decades – Milwaukee’s own Commerce Group – apologize and beg forgiveness for what it helped leave behind? No. Quite the opposite. The company is suing El Salvador demanding millions in tribute for interfering with further possibility of profit. They first used an obscure legal clause involving the World Bank under one of our trade deals – CAFTRA, the US, Dominican Republic, Central American trade policy.

They lost the first round before the trade tribunal judiciary last year. But the financially deteriorating Milwaukee company – foundering for many investment reasons – immediately appealed, as if only on the backs of the desperate small nation could it rebound from its losses. The company still hopes the global trade deals that favor big business give it avenues to win millions of dollars from El Salvador – and so far seems untroubled that such actions cost that struggling government unredeemable millions of dollars in complicated legal defenses.

Before you think Morrill’s story is about one stray company behaving badly, consider how an immense Canadian company -- Pacific Rim, blocked by the worried Salvadorans from operating another mine in similar fashion -- opened an office in the US to qualify under a US trade deal that doesn’t include Canada, just to sue El Salvador for millions of dollars.

Their effort – and the glee of the heavyweight law firms involved in their attack on El Salvador’s coffers – is recounted with amusement, disdain and worry by the Huffigton Post’s Sarah Anderson.

As she relates, the World Bank tribunal turned down Pacific Rim’s claim that moving to the US made it eligible for CAFTA trade agreement. But it sneakily allowed the company to proceed in suing El Salvador under a Salvadoran investment law adopted in 1999 to protect profit potential for international companies, though in this case there is no profit but the gamble that El Salvador will pay Pacific Rim $79 million.

The legal glee comes because the case will take years to proceed through the tribunal and even if it doesn’t succeed, these lawyers -- Weil, Gotshal & Manges and Crowell & Moring – are listed as billing as high as $1,045 per hour. (That will go over big in El Salvador where the household income averages out to $3,426 a year.)

Jan Morrill during her Milwaukee visit

Morrill was invited to Milwaukee last month to speak to fair trade activists before moving around the country on information missions. She operates the Salvadoran headquarters of the International Allies Against Metallic Mining, a coalition of organizations working to support Salvadorans struggling for sovereignty over their own natural resources. Many local fair trade and environmental groups are supporting the fight against the Commerce Group’s legal action, banding together as the Midwest Coalition Against Lethal Mining.

In Wisconsin, the issue of mining involves an ore far easier to mine if laws are followed – iron, not requiring the levels of water use and environmental devastation suffered in El Salvador. Iron mining is quite possible -- when done right and profit-minded corporations don’t write the rules as was attempted by the Walker administration.

Gold and silver mining, which had 20th century American barons salivating to get into El Salvador, requires tons of chemicals and as much water in one day as a family needs to survive for 20 years. While it never did much to raise the workers out of poverty, for decades before bullion prices seesawed, the mine made some outsiders rich and caused the Commerce Group to take over operations in 1968. It may have just missed the real gold rush. In the first half of the 20th century the San Sebastian mine was the most productive precious metal mine in Central America. (What appeals to Commerce Group and Pacific Rim is the new surge in bullion prices – to heck with the impact on rivers and people.)

Continued operations and stepped up efforts led to such obvious human and environmental consequences over the last century that the government was forced to step in and shut down operations in 2006. It was not just the aftermath of acid, arsenic and the rest of the chemical soup fouling the river but rising levels of illness and disease.

The operation of the San Sebastian mine reflected indifference to the community and environment. Geological analysis cites mining runoff as the main reason the water in San Sebastian is undrinkable and either rainwater collection tanks or imported water (at considerable cost) are now used for humans in the region, according to Morrill’s research.

The bad water is still used for agriculture, the second largest industry in the country. The first largest is subsistence provided by relatives living in the US. This gives you a sense of how poor a country can become even when theoretically rich in nature – and in valuable minerals exploited without concern for its people.

Fair trade advocates see another lesson – the vital need that US trade deals incorporate teeth in environmental protection, local authority and financial development within borders.

The most startling part of the story about the global trade deals and the world financial organizations is that there are actions lawyers can take if corporations believe profits are being limited, but almost no legal recourse on issues of destroying the environment, tracing the causes and pursuing redress. Obviously, the richer the defendants, the bigger the barriers they can put up.

Now, while El Salvador’s government struggles to help its own people, it has to spend millions of dollars defending itself in international court from corporations angry that they have been stopped from polluting to make money. And it has to justify its own authority to an international community that has built its main rules around profit.

Morrill has returned to El Salvador where she has helped lead action on the issue for four years. Those who want to help can email her or contact Steve Watrous in Milwaukee.

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