WASHINGTON – A World Bank arbitration court has sided with El Salvador in a dispute brought by U.S. miner Commerce Group, saying it lacked jurisdiction to hear the case.
The Washington-based International Center for Settlement of Investment Disputes did not delve into the merits of the case, citing the claimants’ failure to abide by a provision of the Central American-Dominican Republic Free Trade Agreement.
In handing down its ruling, the court agreed with the Salvadoran government’s argument that it lacked jurisdiction because Commerce had violated CAFTA’s mandatory waiver provision by not halting ongoing court proceedings in El Salvador.
Commerce Group has mined precious metals in the Central American country since 1968.
Between 1987 and the start of 2006, it expanded its mining and related operations, which were governed by exploration licenses and environmental permits issued by the Salvadoran government.
But El Salvador canceled Commerce’s environmental permits in late 2006 and did not renew its exploration licenses.
Commerce argued that those measures constituted a breach of the CAFTA treaty and decided to submit the dispute to ICSID arbitration.
Anti-mining groups allege that Commerce’s operations at the San Sebastian gold mine and San Cristobal mill and plant – both in eastern El Salvador – caused environmental damage.
The mining company was seeking $100 million in damages. EFE