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Chalk Up Another Victory for "Free Trade"

Mining Companies Sue El Salvador

by NICK ALEXANDROV

The revolutionary Salvadoran writer Roque Dalton once remarked, in his poem “OAS,” that “the President of the United States is more president of my country than the president of my country,” an observation still accurate today, some 45 years after Dalton penned those words.  His life, like those of well over 100,000 Salvadorans in the 20th century, ended violently.  But if assassins hadn’t gunned him down in 1975, he would no doubt agree that North American businessmen should be added to the list of outsiders running his homeland’s affairs.

Consider the cases of Pacific Rim, headquartered in Vancouver, and Milwaukee-based Commerce Group.  These companies claim that El Salvador, by refusing to grant them mining permits given their miserable environmental records, is violating their rights, and consequently “are suing the Salvadoran government for more than $400m,” Meera Karunananthan writes in the Guardian.  The situation calls to mind the late 1940s, when banana executives alleged the Guatemalan government, later toppled in the ’54 coup, was discriminating against United Fruit; perhaps some enterprising grad student will one day produce a study of the stirring, decades-long struggle for corporate liberties.  Throughout modern history, these “rights” have been promoted by what are called “free trade agreements,” though hardly worthy of the name, as a quick review of the relevant—thus suppressed and little-known—history reveals.

When the Spanish Empire was attempting to restore its power via the 18th-century Bourbon Reforms, for example, it adopted a policy of comercio libre y protegido—“free trade under the protection of the state.”  Comercio libre shut down textile production centers in Peru and New Spain, freeing their Catalonian counterparts from the burden of competition, in the same way that the 1825 Anglo-Argentine Treaty of Friendship, Commerce and Navigation guaranteed Argentina would serve as a market for British industrial goods, while exporting meats and grains—its “comparative advantage,” in the mythmaking that too often passes for scholarship.  In this world, we see that the treaty “devastated local manufacturing” in Argentina, and more broadly “ensured that England, owing to its greater power over all possible competitors, would maintain an essentially mercantilist relationship with Buenos Aires.”

These comments, from Nicolas Shumway’s The Invention of Argentina, are much to the point, and worth bearing in mind when we consider how Commerce Group and Pacific Rim laid out their cases against El Salvador—specifically, by citing protections the Central American Free Trade Agreement (CAFTA-DR) affords investors.  “The broad scope of protection is reflected throughout CAFTA Chapter 10,” the law firm Crowell & Moring explains in a document prepared for Pacific Rim, noting that one of “CAFTA’s objectives” is to “substantially increase investment opportunities in the territories of the Parties.”  Crowell & Moring’s pedigree is distinguished: “The firm represents some of the toughest defense contractors in the world,” according to a glowing Legal Times profile, “the kinds of companies that send anti-war bloggers into a frothing rage”—what was then Blackwater USA (later Xe, currently Academi), to name one.

Washington’s El Salvador policies also whip said bloggers into one of their characteristic frenzies, no doubt.  Before, during, and after the Cold War, these have been driven by efforts to ensure the country’s lands never serve the subsistence needs of their poor communities.  In December 1931, a U.S. military attaché wrote “that roughly 90 percent of the wealth of the nation is held by about ½ of 1 percent of the population,” a social order geared towards exporting massive amounts of coffee, for which purpose the state had demolished communal landholdings, driving poor farmers onto plantations.  The police, formed to enforce this economic model, was unable to crush the political organizing and periodic uprisings occurring throughout the ’20s and into the early ’30s, prompting General Hernández Martínez’s government to massacre some 30,000 peasants in January 1932, winning the State Department’s respect in the slaughter’s aftermath, informal U.S. recognition that June, and President Roosevelt’s formal recognition—kicking off his Good Neighbor Policy—in January 1934.

A decade later, Washington outlined its postwar aims “to break down the tendency of many foreign governments,” as Paul Nitze put it in May 1944, “toward a closer control of their raw material resources.”  Renewed Salvadoran political organizing and peasant land reclamations in the ’50s, bolstered by the Cuban Revolution’s inspiring example at the end of the decade, rendered the country an obstacle to the U.S. government’s successful achievement of its goals.  Counterinsurgency was the solution, and the Joint Chiefs of Staff clarified in 1962 that an “insurgent” was anyone guilty of “illegal opposition to an existing government,” whatever its type.  Michael McClintock, in his superlative first volume of The American Connection, explains that the Salvadoran government, conforming to U.S. aims, destroyed subsistence farming territories along its Pacific coast to make way for cotton production in the early ’60s—quite a success commercially, though devastating in human costs, in keeping with the historical norm.  By the ’80s, U.S. aid and training had created an apparatus of state repression skilled in the “beautiful technique” of “[a]ttacking civilians,” according to a U.S. mercenary, the majority of its most brutal officers School of the Americas graduates, and the recipient of $6 billion from Washington from 1979 to 1992.

The exquisite strategy just described produced 95% of the 75,000 corpses during the “civil war,” as the period of overwhelming state violence is known.  The era’s destruction was so widespread that it displaced the agro-export elites, as a new dominant class favoring the financial and maquila sectors emerged, implementing its plans for the country with U.S. Agency for International Development guidance.  John Ripton writes in Latin American Perspectives that “rural emigrants” now serve as “the new agro-export,” draining the countryside of potential opposition to current policies, while a quarter of those remaining have little access to potable water.  Restored mining rights for Commerce Group and Pacific Rim would further threaten the country’s water supply, Karunananthan notes in her Guardian piece, citing the former’s track record in San Sebastián, whose residents have “nothing to show for decades of gold extraction but the famous bright orange waters of the San Sebastián river, a classic sign of acid mine drainage from large-scale gold mining,” with cyanide at nine times the accepted level.

The National Roundtable Against Metallic Mining in El Salvador has cited these examples of environmental degradation, among others, in its efforts to ban the industry outright, and 62% of the population supports a bill to this end.  The group’s persistence has also won international attention: a fact-finding mission, whose 45 participants represented a dozen countries, visited several Salvadoran communities last month for a crash course in the issues.

El Salvador’s violent history points to the daunting obstacles facing environmentalists and other activists.  But its legacy of fanatical repression indicates as well the extent to which political organizing threatens the established order—a fact worth keeping in mind as the anti-mining campaign continues.

Nick Alexandrov lives in Washington, DC.  He can be reached at: nicholas.alexandrov@gmail.com.