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)

TeleSur | 21-Sep-2018
ICSID tribunal rules Costa Rica was in its right to stop a tourist construction project on the Pacific coast that violated environmental laws.
Prensa Libre | 24-May-2018
Guatemala se expone a un nuevo arbitraje internacional con posibilidad de una demanda millonaria debido a la suspensión de operaciones del proyecto minero El Tambor, propiedad de Exmingua.
BN Americas | 24-May-2018
Exmingua is planning to launch arbitration proceedings against Guatemala following the suspension of its Tambor gold project.
EIN | 9-Jan-2018
US investors sue Government of Costa Rica under CAFTA free trade agreement for breach of treaty terms and conditions.
Reuters | 19-Apr-2017
El Salvador froze bank accounts and assets belonging to OceanaGold Corp after the mining company refused to pay the country $8 million as mandated by an international court.
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 .

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