The paradoxical complications of the role of foreign direct investment (FDI) in developing countries has long been of concern of champions of human rights, women’s rights, and the environment at large. When enticing foreign companies to invest in their country (often providing low taxes for FDI, low costs of labor, and lax resource regulation), developing countries look to increase GDP, jobs, and overall quality of life for their citizens. But as analysts note, the paradox of the plenty curses many of these natural resource abundant nations for a variety of reasons, ultimately producing less economic growth and development outcomes than believed. What happens when a country recognizes the pitfalls of FDI and wishes to protect its environment instead? The Canadian mining operation, Infinito Gold, has attacked the Costa Rican Government with a one billion dollar lawsuit for what seemed to be “lost profits”. This post will shed some light on the issue of open-pit mining in Costa Rica, the challenging legal battle with Infinito Gold, and where this Canadian company and Costa Rica now stand in this current legal battle—which hasn’t garnered much attention.
As prices for precious metals were at record high, Costa Rica shunned the mining industry back in 2010. Open-pit mining is a surface mining technique of extracting rocks or minerals from deposits that have a relatively thin layer of “invaluable” surface material also known as overburden. Mining advocates say that open-pit activities have become more eco-friendly as of late, and promoting such foreign investment would spur job creation. Biologists and environmentalists are skeptical of how eco-friendly deforestation can be, especially in a country that prides itself as a great friend of the environment. Back in 2010 these issues were at the front of Costa Rican debate: should they remain ecologically sustainable even at the expense of opportunity for development and economic prosperity? Costa Rica said, undoubtedly, yes. President Laura Chinchilla explained to press that Costa Rica decided it was to head toward a model of economic development that coexists with the environment, and distances itself from extractive industries.
A man hangs a banner reading "No to the Mining Industry" during a protest in San Jose on Oct. 27, 2008. Mayela Lopez AFP/Getty Images
According to opinion polls, over 85% of Costa Ricans opposed Infinito’s “Crucitas” open-pit mining project. November 9, 2010, Costa Rica’s Legislative Assembly unanimously banned open-pit mining. In 2011, Costa Rica’s Supreme Court re-affirmed a presidential decree banning open-pit metal mining in the country. Authorities in Costa Rica have noted that Infinito, in fact, owes Costa Rica some $10 million for damage already done to 300 hectares of tropical forest. The company has yet to come up with the money.
Instead of respecting the democratic and legal decision of Costa Rica regarding the rejection of this project, Infinito has conveyed an attempt to sue the country in the World Bank’s International Centre for the Settlement of Investment Disputes. Infinito Gold claimed that Costa Rica violated the Costa Rica-Canada Bilateral Investment Treaty when an Administrative Appeals Court revoked its mining concession in San Carlos, Alajuela, in 2010. Infinito originally obtain said concession from President Oscar Arias’ administration, in 2008. Later, however, the Prosecutor’s Office was ordered to open an investigation of the president for signing off on the project when environmental studies were still being processed.
An aerial photograph of the Crucitas gold mining site in San Carlos, Alajuela, in northern Costa Rica. The Canadian mining company Infinito Gold has been locked in a lengthy legal battle with the government of Costa Rica since an appeals court revoked the concession in November 2010. The Tico Times
After months of threatening the Costa Rican government with a one billion dollar lawsuit over the cancelled Las Crucitas gold mining concession, the Canadian company filed a Request for Arbitration with a World Bank court. Infinito Gold released a new statement this February in which the Canadian mining company backed away from the claim of $1 billon in lost profits, seeking to recoup at least $94 million in expenses incurred during the cancelled project’s development between 1993 and 2010, including interest and legal fees of course:
“The Company emphasizes that, contrary to some media reports, its objective in pursuing its legal remedies is to recoup the costs that have been spent, plus interest, in developing the project over the past 20 years, as opposed to the profits it reasonably expected to earn had it been allowed to fully develop the project.”
Hundreds of thousands of activists around the world defended Costa Rica in petitions and letters to the CEO of Infinito Gold. MiningWatch Canada spokesperson Jamie Kneen said, “This case is another example of the damage corporations can do using investment protections in free trade and investment agreements to try and override the will of small, eco-conscious nations like Costa Rica. Yet the Canadian government continues to promote the entrenchment of corporate ‘rights’ in new trade and investment treaties like the new agreements with Honduras, China, the EU, and the countries in the Trans-Pacific Partnership.”
As prices for precious metals were at record high, Costa Rica shunned the mining industry back in 2010. Open-pit mining is a surface mining technique of extracting rocks or minerals from deposits that have a relatively thin layer of “invaluable” surface material also known as overburden. Mining advocates say that open-pit activities have become more eco-friendly as of late, and promoting such foreign investment would spur job creation. Biologists and environmentalists are skeptical of how eco-friendly deforestation can be, especially in a country that prides itself as a great friend of the environment. Back in 2010 these issues were at the front of Costa Rican debate: should they remain ecologically sustainable even at the expense of opportunity for development and economic prosperity? Costa Rica said, undoubtedly, yes. President Laura Chinchilla explained to press that Costa Rica decided it was to head toward a model of economic development that coexists with the environment, and distances itself from extractive industries.
According to opinion polls, over 85% of Costa Ricans opposed Infinito’s “Crucitas” open-pit mining project. November 9, 2010, Costa Rica’s Legislative Assembly unanimously banned open-pit mining. In 2011, Costa Rica’s Supreme Court re-affirmed a presidential decree banning open-pit metal mining in the country. Authorities in Costa Rica have noted that Infinito, in fact, owes Costa Rica some $10 million for damage already done to 300 hectares of tropical forest. The company has yet to come up with the money.
Instead of respecting the democratic and legal decision of Costa Rica regarding the rejection of this project, Infinito has conveyed an attempt to sue the country in the World Bank’s International Centre for the Settlement of Investment Disputes. Infinito Gold claimed that Costa Rica violated the Costa Rica-Canada Bilateral Investment Treaty when an Administrative Appeals Court revoked its mining concession in San Carlos, Alajuela, in 2010. Infinito originally obtain said concession from President Oscar Arias’ administration, in 2008. Later, however, the Prosecutor’s Office was ordered to open an investigation of the president for signing off on the project when environmental studies were still being processed.
After months of threatening the Costa Rican government with a one billion dollar lawsuit over the cancelled Las Crucitas gold mining concession, the Canadian company filed a Request for Arbitration with a World Bank court. Infinito Gold released a new statement this February in which the Canadian mining company backed away from the claim of $1 billon in lost profits, seeking to recoup at least $94 million in expenses incurred during the cancelled project’s development between 1993 and 2010, including interest and legal fees of course:
“The Company emphasizes that, contrary to some media reports, its objective in pursuing its legal remedies is to recoup the costs that have been spent, plus interest, in developing the project over the past 20 years, as opposed to the profits it reasonably expected to earn had it been allowed to fully develop the project.”
Hundreds of thousands of activists around the world defended Costa Rica in petitions and letters to the CEO of Infinito Gold. MiningWatch Canada spokesperson Jamie Kneen said, “This case is another example of the damage corporations can do using investment protections in free trade and investment agreements to try and override the will of small, eco-conscious nations like Costa Rica. Yet the Canadian government continues to promote the entrenchment of corporate ‘rights’ in new trade and investment treaties like the new agreements with Honduras, China, the EU, and the countries in the Trans-Pacific Partnership.”
This story is still developing, and it will be important to watch how each stakeholder will act in the upcoming months. It is an important glimpse into the problematic situation developing countries find themselves in when luring capitalists and corporations to their lands. As countries become more conscious of ecological stability, practices to extract natural resources will decline. Yet, developing nations still require technical assistance in order to grow their economies and provide for their citizens. The balance of jobs and economic prosperity against sustainable land use practices will be up for debate for the foreseeable future. One can only hope that aggressive neoliberal trade agreements won't interfere with the sovereignty of states, or their ability to be financially stable while providing a equitable and just work and living environment for all inhabitants, human and non-human.
No comments:
Post a Comment