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Guatemala Government Sued By US Company Using ISDS Clause In US Free Trade Agreement

Opposition to a Gold Mine project in Guatemala arose from the potential impacts of the mine on water, public health, and the environment in what is a very dry region of the country. In short, the local environment and welfare of the people living in the region is under threat.

The Guatemalan Supreme Court of Justice suspended the mine in 2016 for lack of prior consultation with Indigenous communities in the municipalities of San Pedro Ayampuc and San José de Golfo, north of Guatemala City. The suspension remains in effect, pending a final decision from the Constitutional Court.

Even after the Supreme Court ordered the suspension, the company continued to operate the mine. As a result, owner Daniel Kappes and the company’s in-country legal representative are under criminal investigation in Guatemala for illegal exploitation of natural resources. The company was also found guilty of operating without a construction license.

The American owned company then filed a law suit in December 2018 at the International Centre for Settlement of Investment Disputes (ICSID) for alleged violations of the Central America–Dominican Republic Free Trade Agreement (CAFTA-DR).

The US$300 million-dollar suit that the US mining company Kappes, Cassiday & Associates (KCA) is bringing against the Central American country is nothing less than an attack on sovereignty of Guatemala and undermines the will of the communities affected by its project and the decision of the Guatemalan courts.

What has this to do with the UK, you may well ask!

Well, put simply, this could well end up happening to the UK in the event we sign a Free Trade Agreement with the USA, which by definition will include the Investor Disputes Settlement clause that ALL trade agreements with the US currently MUST include. There is no possibility of an FTA with the US unless the UK accepts this aspect of any deal.

In the event that a US company dislikes the fact that the UK finds that their processes and product can cause harm to people and their workers and as a result the Government forms legislation to protect those workers and consumers, then the country can be sued by the US company on the grounds of such legislation having a negative effect upon their current profits and indeed those of the future!

Our Trade Secretary Liam Fox is currently formulating deals in secret and has never once commented negatively on the ISDS, nor indicated that he would resist including this in any agreement with the USA.

Meanwhile back in Guatemala a letter signed by 227 Guatemalan and international networks and organisations was delivered to Guatemalan authorities and the US Embassy in Guatemala.

Last month, the peaceful resistance “La Puya” celebrated the seventh anniversary of sustaining the 24-hours-a-day,
7-days-a-week encampment outside the mine entrance. They have faced acts of intimidation, threats, and criminalisation, as well as an assassination attempt against one member in June 2012, reports the Washington and Geneva based organisation; the Center for International Environmental Law.

Community members from the peaceful resistance of “La Puya” presented the letter to government authorities during a congressional hearing on the ICSID process, including representatives from the Ministries of Energy and Mining, Environment and Natural Resources, and Economy, as well as the Human Rights Section of the Public Prosecutor’s Office and others, the organisation's website news release states.

The CIEL news report goes on to state:

In the letter, organizations argue that the suit “represents a further attack on Guatemala’s judicial system.” They point to mounting pressure on the Constitutional Court from President Jimmy Morales over to the Court’s rulings on mining projects, as well as efforts by the executive branch to put the brakes on corruption investigations involving high level officials.

“We fear that the company is using this suit to pressure Guatemalan authorities into an agreement that would remove the multiple obstacles blocking the restart of the Progreso VII Derivada gold mine, including legal processes and social opposition. This would be yet another example of the ‘chilling effect’ that agreements like CAFTA-DR have on public and regulatory policies,” remarked Manuel Pérez-Rocha of the Institute for Policy Studies in Washington, DC.

“KCA’s project is plagued with illegalities, and yet its owners feel entitled to bring a suit against Guatemala. This sort of blackmail to try to undermine Court decisions, as well as the peaceful resistance and rights of local communities, should not be allowed. Unfortunately, we have already seen such arbitration used for similar reasons in the past,” stated Carla García Zendejas from the Center for International Environmental Law (CIEL).

“KCA’s suit is an example of present-day corporate colonialism. Through violence along with legal and political tactics, an elite foreign interest is profiting at the expense of people and planet,” stated Laura Martin, Executive Director of the Progressive Leadership Alliance of Nevada (PLAN).

Members of PLAN also delivered the letter to the company’s office in Reno on Wednesday.

In solidarity with “La Puya” and the residents of San Pedro Ayampuc and San José de Golfo, the 227 organizations call on KCA and the Guatemalan government to abstain from intimidating Constitutional Court judges, that judicial independence be respected, and that decisions be made in accordance with the law. In the same vein, they demand that KCA drop its suit.

Back in the UK, with the UK Government trying desperately to get agreement from all political parties to agree its deal with the EU to leave the largest trade organisation outside of the USA, and campaigns for any deal to be put to the people of the country with an option to remain in the EU, many Trade Unions back the campaign and see that any future Tory Government will be able then to slash worker's rights, food safety and environmental standards not to mention the total sale of the NHS to US Healthcare companies; once we have left the EU.

However, the CWU which holds it's Annual Conference next week starting this Sunday 28th April, is set to debate a motion from its General Secretary in the name of the Unions national body; which precludes specifically the option of a second referendum and prioritises the fight for a general election and a Labour Government.

Source: CIEL / CWU / Unionsafety

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