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)

The Jordan Times | 18-Jul-2024
Imagine a scenario where a private company effectively creates and controls its own jurisdiction within a sovereign country. This company introduces its own currency, enacts laws, and establishes courts, prisons, police forces and even intelligence services.
Havana Times | 8-Jul-2024
The US company is appealing under CAFTA (Central American Free Trade Agreement) for the invasion of its property in Jinotega and the destruction of its avocado and other orchards.
Confidencial | 5-Jul-2024
Empresa estadounidense reclama al amparo del CAFTA por la invasión de propiedad en Jinotega, y destrucción de su plantación de aguacates.
La Jornada | 9-Apr-2024
Es claro que en lugar de promover el desarrollo y el empleo, como se prometió, el CAFTA ha contribuido al desplazamiento forzado de millones de personas (como el TLCAN).
Linda Sánchez | 26-Mar-2024
Congresswoman Linda T. Sánchez and Congressman Lloyd Doggett led 45 of their colleagues in calling on the Biden Administration to work to remove the Investor-State Dispute Settlement mechanism from the Central America – Dominican Republic Free Trade Agreement.
Canal 8 | 26-Mar-2024
El canciller de la República agradeció a los 47 congresistas de Estados Unidos por enviar nota solicitando a la Administración Biden reformar el acuerdo comercial CAFTA-RD el mecanismo Solución de Controversias Inversionista-Estado.
The Intercept | 20-Mar-2024
After the Honduran president repealed a law granting unfettered authority to outside investors, the cryptoquistadors took the dispute to a World Bank arbitration court.
LPE Project | 15-Dec-2023
The stakes for Honduras are not simply the billions of dollars otherwise destined for health, housing, and education. They are the very existence of Crawfish Rock: the past and future of the families who have inhabited the island for centuries.
Project Syndicate | 1-Dec-2023
The ongoing lawsuit brought against Honduras by an American company underscores the unjust and undemocratic nature of the investor-state dispute settlement system.
Tribune | 24-Nov-2023
American billionaires are suing the Honduran government for blocking the creation of a libertarian city-state in the country. If they win, it will be a devastating victory for corporate colonialism over democracy.