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)

Prospera | 10-Nov-2022
In accordance with the Dominican Republic–Central America–United States Free Trade Agreement, Honduras Próspera Inc. and its affiliates submit to the Republic of Honduras this written notice of their intention to submit claims to arbitration.
Proceso Digital | 4-Nov-2022
"En septiembre recibimos notificación de la nota que entregó ZEDE. El tema es que a más tardar el 16 de diciembre tienen que meter solicitud e iniciar el arbitraje", el ministro de la Secretaría de Desarrollo Económico dijo.
The Real News Network | 3-Nov-2022
US senators argue that abolishing special economic zones known as ZEDEs would violate the provisions of CAFTA-DR, including the provision ensuring “fair and equitable treatment and full protection and security.”
Sierra Nevada Ally | 28-Jul-2022
However, locals feel latent tension that the imminent consultation process or the arbitration suit could revive earlier threats, violence, and legal persecution from company employees and contractors.
CIAR Global | 18-May-2022
La cementera estadounidense Sargeant Petroleum ha presentado un arbitraje de inversiones contra República Dominicana por un contrato de concesión de materiales asfálticos.
bnamericas | 18-May-2022
Mining companies are continuing to face political and community headwinds in Guatemala, as authorities push on with consultations needed to lift suspensions that have crippled the industry in recent years.
Peace Brigades International Canada | 2-May-2022
The ZEDEs are free from import and export taxes, but could set up their own internal forms of government, as well as courts, security forces, schools and even social security systems.
Inequality.org | 3-Mar-2022
An attempted assassination, criminalization, and violent eviction in 2014 didn’t stop the Peaceful Resistance of La Puya in Guatemala, which won legal action suspending harmful mining activities.
People’s World | 29-Jun-2021
To seriously address the roots and causes of migration, it is urgent to dismantle the neoliberal rules which grant excessive privileges to transnational corporations.
The American Prospect | 24-Mar-2021
An improbable victory in El Salvador offers lessons for grassroots activists worldwide.

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