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)

Counter Punch | 3-Sep-2015
Over 90 percent of El Salvador’s surface water is contaminated with industrial chemicals, making it unsuitable to drink even if the water is boiled, chlorinated or filtered beforehand. A new action plan for passing a nationwide ban has begun to unfold, as Salvadorans await the outcome of the Pacific Rime ICSID case.
El Salvador | 28-Jul-2015
Luis Parada, a lawyer with the law firm Foley Hoag, is optimistic that the company, Pacific Rim, will not prevail in the proceedings.
El Salvador | 28-Jul-2015
El abogado de la firma Foley Hoag, Luis Parada, es optimista en que la empresa Pacific Rim, no ganará el litigio en el que exige a El Salvador $314 millones por no darle la concesión para extraer metales del subsuelo. Habla del avance y consecuencias que ha tenido este arbitraje para el país.
El Salvador | 24-Jul-2015
El litigio entre El Salvador y la empresa minera Pacific Rim en un tribunal en Washington ha entrado ya a su etapa final y se prevé una sentencia a favor del país, afirmó ayer Luis Parada, el abogado defensor de El Salvador.
IIED | 27-Jun-2015
Civil society organisations can play an important role in carrying and strengthening community voices in arbitration processes, by making submissions to arbitral tribunals.
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.

0 | 10 | 20 | 30 | 40 | 50