The COMP recently warned that affected mining companies could file arbitration cases should the government not honor mining contracts. It said that a number of these are foreign mining firms that have bilateral investment treaties (BITs) and they could sue the government for compensation. The DENR previously announced the cancellation of 75 mineral production sharing agreements (MPSAs), and plans to close 23 mines and suspend five others.
According to IBON, international arbitration is an instrument of investment liberalization, which corporations use to unhamper and secure their profit-seeking to the detriment of countries’ sovereignty in determining what is in the best interest of its people. The World Bank International Centre for Settlement of Investment Disputes (ICSID), for example, is known for siding with transnational corporations (TNCs) and strictly enforcing decisions that include expropriation of assets, said the group.
This mechanism is further institutionalized under free trade deals (FTAs), said IBON. Countries negotiating the Regional Cooperation Economic Partnership (RCEP), for instance, can be sued by investors whenever it is perceived that government policy, law or action harms present and future profits.
IBON’s recent mining study shows that extractive companies have a history of suing governments through international arbitration when their profits are compromised. For example, American oil company Occidental Petroleum Corporation cost Ecuador US$1 billion when the government expropriated Occidental’s assets after it illegally sold its rights to another company. Mining company Pacific Rim, a subsidiary of Australian miner OceanaGold since 2013, sued the government of El Salvador for US$301 million for denying the permit for the El Dorado mine due to environmental concerns.
IBON urged the Duterte government to stand firm on DENR’s order to protect the country’s remaining natural and mineral resources. The closure order will give a respite to the massive drain of mineral resources and the destruction of ecosystems. The group also stressed that government should revoke existing bilateral agreements that allow big local and foreign businesses to plunder the nation’s mineral wealth and that secure corporate interests mechanisms such as international arbitration.###