Interview with Luis Parada, Senior Counsel, Sovereign Arbitration Advisors.

WT: Walking through the background of this story up to what is going on today, Luis can you tell me, who or what is the Santa Marta Five?

Luis Parada: The Santa Marta Five are five community leaders, environmental leaders from Santa Marta in northern El Salvador, who on January 11, 2023, were arrested in the middle of the night from their homes and charged with an alleged crime that supposedly was committed during the Salvadorian civil war more than thirty-two years ago.

They have been detained since then, for over three months. In the past month and a half they have not seen their lawyer, they have not had access to see their relatives or anybody else from the community.

This is a case that has a complete lack of any real evidence. The only evidence the government presented in a written accusation of fifty pages was based on the alleged testimony of a secret witness of unknown identity, who in the written testimony (states) this witness saw with his own eyes what this crime was about and implicated the Water Defenders. On cross-examination on the very first hearing, he contradicted himself and admitted that he did not see anything but was just told.

This is obviously a case with very little merit. Instead, we are convinced this (action) is being used to silence the opposition to mining in El Salvador. They are the environmental defenders that were leaders in the opposition to mining that resulted in a 2017 unanimous law (banning metals mining in El Salvador).

WT: In 1992 El Salvador was coming to the end of a brutal civil war (1979-1992). I think both sides got amnesty for their participation in the civil war, correct me if I am wrong. Then things cruise along from 1992 until 2016 until you find yourself in a pretty unique situation where you are defending the government of El Salvador from a lawsuit from a Canadian mining company called Pacific Rim. Can you tell me what happened there? Why was there a lawsuit? And then I will go from there through more milestones from there to the present day, so people understand the context and the background of how these guys get thrown into detention.

Parada: Starting at the beginning, in 1992, there is a crucial difference from the way you stated it. 

I know this from personal experience, I was assigned to the Embassy of El Salvador at the time. We were being kept abreast of the negotiations from 1990-1991 and into 1992 so that’s how I came to know about the (terms of the) peace agreement.

In the peace agreement, of course, there was a need to end the war and make fundamental changes to the Salvadorian military and political structure.

One of the key issues was for the rebels, the FMLN – Farabundo Martí National Liberation Front - how they would lay down their weapons and trust that the government was not going to slaughter them or arrest them or charge them with any crimes. 

The government of El Salvador at the time, of which I was part, had never recognized the FMLN. They were always referred to as criminals or terrorists. In theory, anything FMLN did was a crime in El Salvador. So, they needed some guarantee that they would not be arrested and charged with anything, from attacking soldiers, attacking a garrison, blowing up a bridge, or whatever they did during the war.

It was negotiated and, in the peace agreement, the government of El Salvador made a commitment to pass all the legislative actions needed for the FMLN combatants to lay down their weapons and be guaranteed reinsertion in the political life of El Salvador in complete legality.

This was only for the FMLN combatants, not for both sides. 

On the contrary, in Chapter One of the peace agreement, which is about the Armed Forces, it was specifically mentioned that there was a need to bring justice to any human rights violations by the army.

So it was not an amnesty for both sides. It was an amnesty for the FMLN because they needed it.

One week after the peace agreement was signed in January of 1992, the Salvadorian legislature approved a National Reconciliation Law that included an amnesty in the terms that I mentioned, only for the FMLN combatants to lay down their weapons.

It excluded specifically from the amnesty any case that would be included in the forthcoming report of the Truth Commission for El Salvador.

That report came a year later in March 1993. Most of the cases that it dealt with were actions committed by either the military or right-wing forces, the death squads, which they say were associated with the military. 

As a response to that Truth Commission report, which named names, and people did not expect that it would, the Salvadorian government then immediately promoted a second amnesty for both sides, with no (exclusion) for cases in the Truth Commission report.

So now there are two amnesties, one that was provided for in the peace agreement and one that was not.

Fast forward to 2016, the Supreme Court of El Salvador, the Constitutional Chamber declared the second amnesty unconstitutional but specifically made reference to the first amnesty, (declaring) it is completely in full force, with the exception of cases included in the Truth Commission report. 

Now with the benefit of having seen the Truth Commission report and seeing that it only included thirty-some exemplary cases representative of different categories and not nearly close to the 22 thousand cases that were presented to the Commission, it excludes from the amnesty cases that even though were not in the Truth Commission report, would be of equal or greater gravity and impact on Salvadorian society.

So the point here is that the 1992 Amnesty for the FMLN, which was part of the peace agreement, that is in full force, should prevent El Salvador from starting this case (against the Water Defenders).

With regard to the International Petition against El Salvador, it started in 2009 and ended in 2016, lasting seven years. It was brought by Pacific Rim, a Canadian mining company, which was later acquired by Oceana Gold, also Canadian, but its principal place of business is in Australia.

(Pacific Rim) sued the Republic of El Salvador in an international arbitration tribunal for allegedly not granting them a concession for gold extraction that they had applied for since 2004. The company alleged they had complied with all the legal requirements to get the concession but for political reasons the government of El Salvador never approved or denied it, just kept it in limbo.

WT: This company, Pacific Rim Gold brought a lawsuit against the Republic of El Salvador. I’m trying to understand this, if I don’t have a signed agreement with a country, how is a lawsuit allowed to go forward by the judiciary if there’s no agreement in the first place? 

Parada: I was loosely referring to it as a lawsuit, it was not a lawsuit in a court of law. It was an international arbitration before the International Centre for Settlement of Investment Disputes (ICSID) in Washington DC. The jurisdiction to bring this claim was allegedly based on an international treaty, the Central American-Dominican Republic Free Trade Agreement, CAFTA, and also on the investment law of El Salvador that at the time gave access under the ICSID convention to foreign investors in investment-related disputes with El Salvador.

So there were international petition claims that Pacific Rim Mining Corporation brought against El Salvador through ICSID under CAFTA and the investment law. You would think, how could a Canadian company, and Canada not being part of the CAFTA treaty, how could this company bring a claim against El Salvador under CAFTA?

These multinational or international companies work through subsidiaries. (Pacific Rim) had a subsidiary in the Cayman Islands which existed only on paper. It had no employees, no physical location, no desk, no phone number, and only a PO Box in the Cayman Islands. After the dispute had already arisen, Pacific Rim of Canada moved the registration of this subsidiary company – on paper -- from the Cayman Islands to the United States. 

As a new United States company, PACRIM Cayman was the one that brought this claim against El Salvador. 

We were able to successfully show that PACRIM Cayman did not have any physical presence in the United States and that it was owned or controlled by Pacific Rim Mining, a corporation of Canada which is not part of CAFTA and therefore could not benefit from CAFTA. The CAFTA part of the arbitration was dismissed on a jurisdictional objection but the case continues under the investment law of El Salvador. So that’s the story. (Pacific Rim) had exploration licenses that expired in January 2004 but it did not have a concession for mining/extraction. So that’s how they used the international treaty and the investment law of El Salvador to start an international arbitration case against El Salvador.

WT: You were part of the defence team, if not the leader of the defence team on behalf of El Salvador, do I have this right?

Parada: Yes. At the height of the arbitration, which was the hearing on the merits of the case in Washington (DC) in 2014, there were 12 US attorneys involved on the team, and we had a local Salvadorian team with three attorneys providing support in the Salvadorian law.

In 2016, two years later, is when the arbitration tribunal issued its award, which ICSID calls the final decision, this was vindication for El Salvador. We showed and the tribunal accepted that El Salvador had the right to not grant the concession because the company PACRIM Cayman had not complied with the legal requirements under Salvadorian law to get the concession. 

The initial claim (against El Salvador) was $340 million, but because of mathematical errors in the calculation of damages that our experts pointed out, the claim that was put to the tribunal at the final hearing was $250 million. In the end, in their 2016 award, the tribunal said that because the company did not comply with the legal requirements to get the concession, El Salvador owed nothing. On the contrary, the company had to reimburse El Salvador eight million dollars towards legal expenses.

WT: This brings us to something I would like to explain to all our viewers in Mexico, the US and Canada. El Salvador now has banned all metal mining, is that correct? If that is correct, what year was that and what was the process to go forward with a ban like that?

Parada: The desire to have a ban on metallic mining started even before Pacific Rim started its international petition against El Salvador in 2009. I think it was first articulated in 2005. The Water Defenders had approached me about supporting such a ban, however, with the international petition taking place, I advised it would not be good to change the legal framework for mining in El Salvador because that could have detrimental effects on the case.

When the ICSID tribunal issued its award on Oct 14 of 2016, the 50^th anniversary of the ICSID convention -- to the day -- it opened the door for the civil society groups that wanted this ban on metallic mining to push the effort and build up popular support. It only took five months for success, and the bill banning metallic mining was unanimously approved on the 29th of March 2017. All congresspeople were present, 70 out of 84 were present for the vote, all 70 voted in favour, there were no abstentions and no votes against; the bill was unanimously approved. The President of El Salvador signed it a few days later and it became law. 

This is something the current government is trying to change.

WT: So this brings us from 2017 to the present day, 2023. A country that had banned metal mining, in fact, put this into law by a unanimous vote of the people in the house, how does it come to be now, that in 2023 a mining company has even bothered to apply for a mining permit?

Parada: Under the current ban on metallic mining, of course, no company can make a formal application for exploration licenses or an extraction concession. What has changed is the attitude of the current government of Nayib Bukele. 

Since Nayib Bukele came into office in 2019, he has privately expressed interest in reactivating mining supposedly as a way to get more revenue for the government.

I have information, but I cannot make reference to the private information that was received from within the government, from some government officials who do not agree (with Bukele). It was the President's personal decision personally to start to take steps to reactivate mining.

This started early on in the presidency, so we are talking about pre-pandemic, 2019.

There have been a series of smaller steps which perhaps your next interview, Pedro Cavezas can address in more detail, such as El Salvador joining an international organization of countries with mining. If you don’t have mining, why would you want to get involved in such a conversation? There also was within this year’s budget, four and a half million dollars approved for the study, updating and revision of the mining law. There have been unknown people not from El Salvador -- some think they are Peruvian -- showing up in the area where Pacific Rim wanted to mine, (inquiring) to buy or lease land, which you would need to be able to mine underneath.

So all the steps to reverse the ban on mining law were happening, and since 2021, the civil society groups behind the mining ban started to sound the alarm about these signs of interest by the Bukele government toward allowing mining again.

The Santa Marta Water Defenders were the first to sound the alarm about the intentions of Pacific Rim because that is the area where they live. They were leaders in the coalition of non-governmental organizations, that brought about the awareness and the political motivation to pass the law banning metallic mining. These are the ones leading the awareness effort of the early signs of the government wanting to reverse the mining ban. Now with the arrest and really unwarranted detention of the Water Defenders, the Santa Marta Five, it is clear this is part of the process to bring about the reversal of the mining ban.

There can be no other explanation for this sequence of events. The government (appears) to be moving toward a reversal or repealing of the mining law, which they can do with their legislative majority, they can reverse the law in a matter of an hour if they want to. 

Right now they have just created the conditions to eliminate the opposition and intimidate the others as part of the process. Then they will present this re-opening of mining as a step to reactivate the economy saying, “Why if we have been blessed with gold, we should not extract it safely so we can develop the country?” Nice stories that they make up at the beginning, but in the end doesn’t work out that way.

El Salvador is a peculiar country, its very small 8000 square miles, dense population, prone to earthquakes, mudslides and other environmental disasters that could turn any residues, such as cyanide from the processing, into the main river of the country. This is not a remote area of a big country where spills won’t have an effect. Anything that happens in the areas where minerals are mined is right next to the main river that provides the drinking water for half the country,

This is not high-quality gold or a high concentration of gold. It would take six tons of rock to make a gold ring for your finger. It will require a lot of destruction of mountains and digging underneath. El Salvador can’t afford that.

WT: To wrap this up, give a clear statement to the jury – where do you go from here Luis?

Parada: This detention and criminal prosecution of the five Water Defenders is a test for justice in a country where the President controls not only the executive branch of government but also the legislative and the judiciary. There is no separation of powers, there is no judicial independence.

And, it is a case where the President is trying to use justice, related to the civil war of the 1980s in El Salvador to do justice not only to the accused but also to the entire environmental protection movement. 

Moreso, the government is violating a key part of the peace agreement that brought an end to the civil war, in which an offer was made to the FMLN to lay down their weapons and integrate themselves into the social and political life of the country, in exchange for a guarantee that they will not be prosecuted for crimes like this one. Yet the government in its accusation did not (acknowledge) the 1992 National Reconciliation Law with an Amnesty for the FNML for cases like this one.

So it puts in doubt the word of a country, when a country gives a word in an agreement signed not only by the government and the rebels but also by the Secretary-General of the United Nations Boutros Boutros-Ghali, at the time in January 1992, then it comes thirty years later to not even mentioning the existence of that agreement, much less respect it.

How are civil wars going to end if a commitment a government makes on behalf of a country is not honored? So for all these reasons, it is imperative that there is international pressure on the government of Bukele to stop using justice against innocent people, who are no more or no less than environmental defenders. That is what we need to do and demand the immediate release and dropping of charges that never should have been brought against the Water Defenders.

WT: Luis Parada, I think we will leave it there. Thanks for doing this.