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9 February 2017 | | |

El Salvador: OceanaGold (Pacific Rim) plans to sue the State; organizations demand mining ban

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While OceanaGold, one of the largest mining companies in El Salvador, delays compliance with its obligation to compensate El Salvador, several social forces are demanding a metal mining ban.

OceanaGold company, which in 2013 acquired Pacific Rim, has until February 14 to determine if it will pay the compensation amounting to 8 million dollars to El Salvador as ordered by the International Center for Settlement of Investment Disputes (ICSID), a World Bank body last October.

The ICSID gave 120 days to review its ruling, which were taken by OceanaGold to decide whether they will comply with the arbitration award or they will submit a plea of nullity. El Salvador won the lawsuit against Pacific Rim / OceanaGold, which had been filed in 2009 by the company to request the State the payment of approximately 250 million dollars as compensation for not letting it exploit El Dorado mine in San Isidro, Cabañas.

In 2002, the company had started exploration works in the mine after acquiring permits, but it was never authorized to exploit it. El Salvador is Central America´s smallest country and also one of the countries with the highest levels of environmental deterioration.

In 2012, the ICSID had ruled that Pacific Rim / OceanaGold could not rely on the Central America, Dominican Republic - US Free Trade Agreement (CAFTA) to advance with the lawsuit. However, the proceedings were allowed to continue because the mining company argued that Chapter 15 of El Salvador´s Investments Law was applicable.

The award establishes that Pacific Rim was unable to deny the evidence submitted by El Salvador and that it did not comply with the minimum requirements to obtain environmental and mining permits demanded by the Salvadoran law.

Meanwhile, San Salvador´s Archbishop, Luis Escobar Alas, said on Sunday that together with the José Simeón Cañas University (UCA), they will submit a bill proposal to the Salvadoran Parliament to ban mining in El Salvador.

Escobar Alas said that the aim was to protect the population, fauna and flora from the impacts of open pit resource exploitation. He highlighted that the sectors will submit the proposal and expect lawmakers to give their approval in order to avoid these practices.

Open pit mining is an industrial activity with a high environmental, social and cultural impact. It is also an unsustainable industrial activity by definition, since the exploitation of the resource supposes its depletion, in addition to the contamination of other resources.

According to a poll published by the Catholic sector, a wide majority of the Salvadoran population is strongly opposed to metal mining in the country. In their request to the political authorities, they also quote Pope Francis.

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