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)

IIED | 27-Jun-2015
Las organizaciones de la sociedad civil pueden desempeñar un papel importante representando y fortaleciendo las voces de las comunidades en los procesos de arbitraje, presentando escritos de alegaciones ante tribunales de arbitraje.
Public Citizen | 12-Dec-2014
The European Commission’s claim that threats posed by the investor-state dispute settlement system can be fixed by “improving” ISDS provisions in trade pacts has already been proved false, says Public Citizen
FPIF | 25-Nov-2014
Ten years after the approval of DR-CAFTA, we are seeing many of the effects that citizens who opposed the deal cautioned about., write Manuel Perez-Rocha and Julia Paley.
Public Citizen | 23-Aug-2014
Pacific Rim Mining Corp., a Canadian-based multinational firm, sought to establish a massive gold mine using water-intensive cyanide ore processing in the basin of El Salvador’s largest river, Rio Lempa.
Reuters | 4-Jun-2012
Canadian company Pacific Rim can move forward under El Salvador law with a case against that country’s government for blocking a gold mining project, but cannot file suit under a regional trade agreement, a World Bank arbitration panel ruled.
AFL-CIO | 15-Dec-2011
Tomorrow, the AFL-CIO will join the Institute for Policy Studies (IPS) and activists from a range of labor and environmental groups to converge on the World Bank headquarters in Washington, D.C., for a noon protest in opposition to a CAFTA case being brought against the Salvadoran government by Pacific Rim.
| 28-Jun-2011
Pacific Rim is suing the Salvadoran government in an international investment court, one of scores of cases in recent years in which frustrated oil, gas and mining investors, using provisions of trade agreements, have sought to recoup losses from mostly developing countries.
La Prensa Gráfica | 21-Mar-2011
“El tribunal determina que la disputa no se encuentra dentro de su jurisdicción y competencia de conformidad con el CAFTA.”, Resolución del tribunal del CIADI
| 11-Aug-2010
In a decision with implications for the national sovereignty of member states under US trade pacts, a World Bank tribunal has approved a Canadian mining company’s controversial lawsuit against the government of El Salvador.
OMAL | 23-Jun-2009
Las empresas representadas bajo el nombre de Pacific Rim Cayman LLC, en el marco del Tratado de Libre Comercio entre Estados Unidos, Centroamérica y Republica Dominicana (CAFTA - DR por sus siglas en inglés) demandan al Estado por una cantidad inicial de US$77 millones de dólares, en concepto de indemnización por daños a la inversión realizada en nuestro suelo.

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