Note: After a seven-year battle, this victory of the Peaceful Resistance La Puya over a specious claim for damages from U.S. mining company KCA is a win for the affected Guatemalan communities, a win for indigenous rights and a win for justice. It strikes a blow against one of the most unjust and corporate-oriented features of the so-called Free Trade Agreements–the ability of transnational corporations to sue governments for lost profits projected into the future. This precedent will fortify global opposition to the Investor State Dispute Settlement clauses in these agreements and strengthen the ability of indigenous peoples to defend their communities and their resources. Mira, as an organization that has supported La Puya for years and denounced the corporate-centered dispute resolution mechanisms, we sincerely thank the organization for its many years of research, grassroots organization and resistance that finally resulted in this victory–a victory not just for Guatemala, but for communities in resistance against extractivism all over the world.
Water defenders from the Peaceful Resistance La Puya, just north of Guatemala City, celebrated an important victory over the holidays. On December 23, an arbitration panel at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) ruled against Nevada-based Kappes, Cassiday, and Associates (KCA) in its nearly half a billion-dollar arbitration claim against Guatemala.
KCA’s case was enabled by exclusive privileges that allow transnational corporations to sue governments in the Free Trade Agreement between the U.S., Central America and the Dominican Republic (CAFTA-DR). The company sought hundreds of millions of dollars in response to the court-ordered suspension of its gold mining project Progreso VII Derivada for lack of free, prior, and informed consultation with affected Maya Kaqchikel and Xinka peoples.
In their response, the Peaceful Resistance La Puya underscored in a communique that it is they who have suffered the harms of KCA’s investment:
“This arbitration began in 2018 because the company and previous Guatemalan government administrations failed to respect the will of the population and their rejection of precious metal mining in defense of life, water, and territory. The result of this violation by the State in collusion with KCA has been conflict, local discord, intimidation, repression, and criminalization of the communities in resistance, and, finally, this international arbitration process that lasted seven years.”
La Puya engaged with Guatemala’s legal defense team during the course of the arbitration, providing testimony to the arbitration panel. Also, in order to defend its case, Guatemala’s defense team drew heavily on the resistance’s arguments showing that the company did not comply with Guatemalan regulations and that its project should have never been approved. In this way, the government recognized the legitimacy of La Puya’s struggle for over a decade in defense of water, life and territory.
IAReporterrevealed that KCA failed in its claim because “they had failed to adequately prove causation.”
About this, the Peaceful Resistance La Puya remarked:
*“We feel satisfied and vindicated in our peaceful struggle. KCA lost its wager to make millions of dollars through this international arbitration process, which it initiated knowing that it would never win the consent of communities that have always said no to its unviable project. This project is so bad that the company couldn’t even defend it in an arbitration system designed to protect the investments of transnational corporations.” …
“In this unfair arbitration system, which is a one-sided playing field where only transnational corporations can sue states and not vice versa, the State effectively cannot win. It simply does not lose. This is an opportune moment for Guatemala to review the commitments it has made in investment treaties and decide, weighing the costs and benefits, whether or not to remain in this system.”*
The peaceful resistance also reaffirmed their commitment to seek the cancellation of the Progreso VII Derivadoproject and ensure no further mining licenses are granted in the area.
While the text of the final decision has yet to be made public, the Guatemalan Comptroller’s Office (PGN) reported that the company will now have to repay the Guatemalan government roughly $380,000 in arbitration costs. According to IAReporter, the Guatemalan government will have to cover its own legal costs, which on average cost $4.7 million.
The full text of the communique from La Puya is available in English and Spanish. The video of their December 28 press conference is also available on Facebook.
Jennifer Moore is the Latin America Program Coordinator at MiningWatch Canada and contributes to the Americas Program. www.americas.org/es
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