Why Mining Corporations Love Trade Deals
From the salmon-spawning waters of Alaska to the cloud forests of Ecuador, communities are standing up to mining projects that threaten their health, environment, and livelihoods.
But mining corporations are fighting back with a powerful tool buried in trade and investment agreements: the ability to go to private, unaccountable tribunals and sue governments that act to protect communities from mining.
In these private tribunals, which sit outside of any domestic legal system, corporate lawyers - not judges - decide whether governments must pay corporations for halting destructive mining projects. To date, mining corporations have used these private tribunals to sue over 40 governments more than 100 times.
In two-thirds of the concluded cases, governments either have been ordered to pay the mining corporations or have settled with them, which can require handing over payment and/or weakening mining restrictions. In the 44 publicly available mining cases still pending, mining corporations are demanding over $53 billion from governments.
And it’s getting worse. In the first five months of this year, mining corporations used private trade and investment tribunals every 2.5 weeks on average to launch, advance, or win cases against mining restrictions in Latin America alone.
The U.S. is not immune from such challenges. In January, Canadian mining corporation Northern Dynasty Minerals threatened to sue the U.S. government in a private tribunal under the North American Free Trade Agreement (NAFTA) for rejecting a massive gold and copper mine in Alaska. Local indigenous groups and fishermen overwhelmingly opposed the project, given its threats to a watershed that supports half of the world’s population of wild sockeye salmon. Yet, Northern Dynasty alleges that the mine denial violated its broad NAFTA rights by frustrating its “expectations.”
We could see many more such threats to U.S. mining restrictions if Congress were to pass two looming trade deals: the Trans-Pacific Partnership (TPP), which Congress could consider this year, and the Transatlantic Trade and Investment Partnership (TTIP). These two deals would newly empower more mining corporations - including three of the world’s six largest - to sue the U.S. government in private tribunals for rejecting dangerous mines.
Latin America knows this threat all too well. In March a private tribunal ordered Ecuador to pay over $24 million to Copper Mesa, a Canadian mining corporation, for terminating a copper mine project intensely opposed by local communities. The mine would have been drilled in a cloud forest, next to an ecological preserve recognized internationally for its biodiversity. The corporation responded by asking a private tribunal of three lawyers, under a Canada-Ecuador investment pact, to order compensation from the government.
Incredibly, the tribunal granted Copper Mesa’s request despite acknowledging that the corporation had responded to local opposition to the mine by “recruiting and using armed men, firing guns and spraying mace at civilians, not as an accidental or isolated incident but as part of premeditated, disguised and well-funded plans to take the law into its own hands.”
One might think that Copper Mesa’s case should be tossed out, given the corporation’s “premeditated” use of live ammunition against people protesting a mining project that threatened their communities and a nature reserve. Instead, the private tribunal merely reduced by $5 million the amount that it ordered Ecuador to pay the mining corporation. Indeed, the tribunal argued that the government, rather than backing the local communities, “should have attempted something to assist” the corporation it its efforts to fend off the protests.
Clearly, these trade and investment pacts prioritize foreign investors’ interests over local communities’ rights. In fact, Canadian-owned mining corporation South American Silver recently said just that in a pending private tribunal case. The corporation is demanding $386 million from Bolivia for revoking a silver mine project that, like Northern Dynasty’s rejected copper mine in Alaska, was strongly opposed by indigenous communities. In a recent submission to the tribunal, the corporation bluntly asserted that the broad rights it enjoys under an investment pact cannot not be “degraded...in order to uphold the putative rights of indigenous communities.”
Just a few months later, U.S. corporation Tobie Mining and Energy launched a similar case against Colombia for protecting Amazon rainforest land where the corporation planned to mine for gold. Tobie claims that the government’s decision to create a nature reserve and prohibit mining within its borders violates the corporation’s broad rights under the U.S.-Colombia Free Trade Agreement.
Tobie is asking a private tribunal to order Colombia either to allow mining in the Amazon, or to pay $16.5 billion - over 25 percent of Colombia’s national budget - to the corporation. Despite admitting having spent only $11 million in mining-related preparations, Tobie justifies the $16.5 billion demand by claiming it’s what the corporation hypothetically could have earned if allowed to extract all the gold and iron believed to lie beneath the rainforest land.
This barrage of corporate attacks on mining safeguards offers a clear lesson: we cannot afford to empower more mining corporations to use private tribunals to undermine communities’ efforts to shut down dangerous mines. But the TPP - and TTIP, as proposed - would do just that. To respect communities’ rights to protect their air, water, and livelihoods, we need to replace these polluter-friendly deals with a new model of trade.