CAFTA

The US-Dominican Republic–Central America Free Trade Agreement (CAFTA for short) was signed in 2004. It encompasses the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic.

The investor-state dispute settlement (ISDS) mechanism specified in CAFTA has provided US companies privileged means to challenge national laws and claim millions of US dollars in compensation in Central America. The US has only been challenged once (case still pending).

As of end of June 2015, CAFTA was invoked in about 1% of all ICSID cases.

The most well-known cases include:

TCW (US) vs. The Dominican Republic: case settled in 2009 for US$26.5 million to the investor, an investment management corporation.

Railroad Development Corporation (US) vs. Guatemala: US$18.6 million awarded in 2012 to the investor in a dispute over a railroad contract.

Pac Rim Cayman LLC (Canada, U.S.-based subsidiary) vs. El Salvador: in 2008, El Salvador denied a mining permit to Pac Rim due to environmental concerns. In 2012, a CAFTA tribunal allowed the mining corporation to pursue its claims at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) under domestic investment law. Case is still pending.

(November 2015)

Lexology | 16-Feb-2017
Pac Rim Cayman raises interesting jurisdictional issues as well as environmental and social justice issues in the context of resource development in developing countries.
Taylor & Francis | 17-Oct-2016
The TPP threatens to extend the most draconian feature of the contemporary free trade model: private corporation’s ability to sue sovereign nations.
Listin Diario | 24-Jun-2016
A raíz de este proceso el Ministerio de Medio Ambiente y Recursos Naturales está revisando todos los procedimientos relativos a las autorizaciones ambientales con la finalidad de actualizarlos.
Upside Down World | 21-Jun-2016
The long-running struggle of rural communities in Guatemala against the United States-based mining firm Kappes, Cassiday, and Associates (KCA) continues in Guatemala’s national courts.
Prensa Latina | 20-Jun-2016
The Guatemala Mining Explorations (Exmingua) threatens with filing a lawsuit against Guatemala after being forced to suspend operations by decree of the Constitutional Court .
Bretton Woods Project | 30-Sep-2015
This briefing finds significant ICSID bias in favour of corporations and commercial interests by analysing ICSID overall and by looking at a specific case brought by a global mining corporation against El Salvador.
The Argentina Independent | 29-Sep-2015
El Salvador is defending itself against a US$301m lawsuit filed after it blocked a mining project to protect the country’s heavy-polluted water supply. The imminent verdict will set a precedent amid a growing trend of companies suing governments when they can’t exploit their natural resources.
Counter Punch | 3-Sep-2015
Over 90 percent of El Salvador’s surface water is contaminated with industrial chemicals, making it unsuitable to drink even if the water is boiled, chlorinated or filtered beforehand. A new action plan for passing a nationwide ban has begun to unfold, as Salvadorans await the outcome of the Pacific Rime ICSID case.
El Salvador | 28-Jul-2015
Luis Parada, a lawyer with the law firm Foley Hoag, is optimistic that the company, Pacific Rim, will not prevail in the proceedings.
El Salvador | 28-Jul-2015
El abogado de la firma Foley Hoag, Luis Parada, es optimista en que la empresa Pacific Rim, no ganará el litigio en el que exige a El Salvador $314 millones por no darle la concesión para extraer metales del subsuelo. Habla del avance y consecuencias que ha tenido este arbitraje para el país.

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