The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

Why are Salvadorians rejecting mining investments in their country?

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Residents of San Isidro (Cabañas, El Salvador) look out over a valley where Pacific Rim/OceanaGold hopes to begin mining gold and silver. Photo: Jeff Deutsch / Oxfam America

Communities believe there is no hard choice between development and survival in the OceanaGold vs. El Salvador mining lawsuit.

Julio Urdaneta is the Editorial Assistant for Oxfam America’s Politics of Poverty blog.

I was mystified. Why would thousands of Salvadorians be against something that could potentially bring jobs and development to their country?

I have been to El Salvador twice, so I can attest that this Central American nation of 6.3 million is not precisely booming.

Outside of San Salvador, the bustling capital, many people struggle to find work and make a decent living in a country still reeling from more than a decade of civil war and now mired in gang violence, high rates of economic inequality and poverty and very limited access to clean water.

So, why would you be against mining investment?

There cannot be extractive mining in El Salvador, local activist Vidalina Morales said during a visit to Washington, DC last March. And she is not alone in her conviction.

“Different sectors in the country’s civil society are in agreement with this,” she said. “The Catholic Church, the government, prior and current, and many NGOs.”

“There have been plenty of studies that have stated that El Salvador could suffer dire consequences if extractive industries operate in its territory.”

Salvadorans are clear that they oppose mining because of these environmental and health concerns: so far they have voted overwhelmingly against it in three municipal consultations, and government authorities have been considering the first national ban on mining.

But a foreign mining company isn’t interested in what the people want. The company has engaged in public relations campaigns and lobbying to unsuccessfully try to pressure El Salvador to support mining. When the government did not grant them a mining permit, they decided to change tactics and use a lawsuit, despite failing to fulfill the legal requirements. Using a now-amended Salvadoran investment law, the company sued the government for $300 million – for lost potential profits – in a foreign tribunal, thousands of miles from El Salvador’s democratically-elected governments and court system.

Now the country is dealing with legal fees and facing a huge potential penalty for enforcing their own laws. But activists like Morales and others members of the National Roundtable on Metallic Mining –La Mesa – are fighting back.

Accompanied by Elvis Zavala from the local community radio station Radio Victoria, Morales delivered more than 190,000 signatures to the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID), which is deciding the lawsuit, and to the embassy of Australia, where OceanaGold is based, asking them to side with El Salvador in the lawsuit.

Morales’ organization, ADES, is working closely with civil society, local media and an international network of partners, including IPS, Mining Watch Canada, Salvaide, WES, CIEL, Casa Maryland and others, to raise awareness around the world about the environmental and social damages a mining venture could do in her homeland.

“El Salvador is a densely populated, geographically small nation, with close to 300 inhabitants per square kilometer,” she said. “If mining comes to our country, our rivers and others sources of water could be contaminated and could damage our existence.”

Intense and constant seismic activity is also a concern. “El Salvador is colloquially known as the ‘valley of the hammocks’ because it is always swinging, due to earthquakes,” said Zavala. “What would happen if, thanks to an earthquake, a mine collapses?”

OceanaGold’s mining project in Cabañas, where Zavala and Morales are from, would bring only 600 jobs to the region, home to around 200,000 people of working age, according to Zavala.

“The employment prospects are practically nil,” Morales said. “And on the other hand, violence and social conflicts tend to increase [when mining starts], just like it happened in Honduras and Guatemala. Police and armed forces go to ensure the companies facilities are secured, leaving the rest of the communities unattended.”

With all its environmental and socio-economical risks, extractive industries are far from being a golden ticket to sustainable development. Mining operations in other Latin American nations (copper in Chile and Peru, oil in Colombia and Venezuela) have yielded mixed results, to say the least, in development and poverty reduction. So, what is the alternative for development in El Salvador, a country in need of jobs and foreign investment?

“We have always lived out of agriculture,” Morales said. “We have proposed the government to help reactivate agriculture.”

She might have a point, as El Salvador is blessed with eternal sunshine, fertile lands and important water resources. But will farming be enough?

“If we invest [in agriculture] the money we are spending now in trying to stop this lawsuit, it will be,” she said.

Ultimately, El Salvador has the right to decide how they want to develop economically. The country, its people and its democratically-elected government, should weigh the risks and benefits. On the issue of mining, the people and the government have decided that the risks do not outweigh the benefits. OceanaGold needs to respect the people of El Salvador, and stop exporting the decision to a foreign court in an attempt to force mining on communities.

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  1. Pingback: What’s behind El Salvador’s massive gold reserves sale? : Mining Media Group

  2. Munsonfl@yahoo.com'Margaret Fogg

    I am trying to write The World Bank tribunal to rdequest that they side with the folks in El Salvador who do not want the gold mining because of their fear for damage to their clean water supply. This is an important point and I suppo0rt their decision.

    Reply
  3. Munsonfl@yahoo.com'Margaret Fogg

    I am trying to write The World Bank tribunal to request that they side with the folks in El Salvador who do not want the gold mining because of their fear for damage to their clean water supply. This is an important point and I suppo0rt their decision.

    Reply

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