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CAFTA

The US-Dominican Republic–Central America Free Trade Agreement (CAFTA-DR or 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.

As of end of 2019, CAFTA was invoked in 11 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 (US) vs. El Salvador: In 2008, El Salvador denied a mining permit to Pac Rim (now OceanaGold) due to environmental concerns, and notably the impact on water resources. In 2012, the arbitral tribunal dismissed jurisdiction over the CAFTA claims but assumed jurisdiction of the claims under the domestic investment law. In October 2016, the tribunal decided that the company’s case was without merit.

Photo: Danny Hammontree / CC BY-NC-ND 2.0

(March 2020)

ISDS cannot be fixed
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
CAFTA , Canada , EU , investor-state disputes | ISDS , NAFTA | USMCA , TTIP , US
What “free trade” has done to Central America
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.
CAFTA , investor-state disputes | ISDS , mining , US
CAFTA investor rights undermining democracy and the environment: Pacific Rim mining case
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.
CAFTA , Canada , El Salvador , environment , investor-state disputes | ISDS , mining
Canadian miner’s complaint can proceed under El Salvador law
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.
CAFTA , Canada , El Salvador , environment , investor-state disputes | ISDS , mining
Labor, environmental activists to protest World Bank’s CAFTA tribunal
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.
actions | resistance , CAFTA , Canada , El Salvador , investor-state disputes | ISDS , US
First a gold rush, then the lawyers
| 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.
CAFTA , Canada , El Salvador , environment , investment | BITs , investor-state disputes | ISDS , mining , US
El Salvador gana batalla en demanda por minería
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
CAFTA , El Salvador , investor-state disputes | ISDS
World Bank approves mining company suit against El Salvador
| 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.
CAFTA , Canada , corporate interests , El Salvador , environment , ICSID , investment | BITs , investor-state disputes | ISDS , mining , US
Millonaria demanda de Pacific Rim al Estado Salvadoreño. El legado del TLC en Centroamérica
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.
CAFTA , corporate interests , El Salvador , investor-state disputes | ISDS
Canadian company threatens El Salvador with CAFTA lawsuit over mining project
Upside Down World | 22-Dec-2008
A Canadian mining company intends to sue El Salvador’s government for several hundred million dollars if it is not granted permission to open a widely unpopular gold and silver mine that scientists warn would have devastating effects on local water supplies.
CAFTA , Canada , El Salvador , investor-state disputes | ISDS , mining