Colombia vs. Multinational mining

Those who seek to defend the environment in Colombia are used to having their lives threatened. They are less accustomed to sparking hundred million dollar lawsuits against their nation from companies listed on the London Stock Exchange. Increasingly, however, multinational corporations are using provisions within trade agreements (ostensibly designed to promote foreign direct investment) to threaten Colombia with crippling reparations if its courts and its democratically elected politicians make decisions that negatively affect their profits. This tactic limits the sovereignty of a democratic state and can effectively deny government and the courts the opportunity to make vital decisions about environment and security policy in the national interest.

Human rights and the environment

In February this year, I visited Tolima, a region in the centre of the Andean country, spanning the central and eastern cordilleras. A friend of mine, Hans, took me to see part of the Santa Ana mine near the town of Falan. The machines were quiet when we visited and orchids were flowering by the roadside. The courts had suspended the development of the mining operation in thirteen locations across the municipality because of a lack of “due process and citizen participation.” Many locals, he told me, were concerned about the risk of cyanide, regularly used in the extraction of gold ore from the substrate, getting into the water supply. What is more, Hans complains, the mining contractors began tearing up the earth before they had acquired the relevant permits, so that when locals began to complain a court order was needed to halt the operation.

Halted gold mining operation near Falan, Tolima (February, 2023)

The ambivalence of President Iván Duque’s administration (2018-2022) towards the historic 2016 peace agreement has contributed to a deteriorating security situation in the resource-rich nation. Rural communities whose land sits atop precious metals or fossil fuels find themselves between a rock and a hard place. The development of mines in their neighbourhood can lead to species extinction and habitat loss for endemic species, desecration of sacred sites, poisoning of water supplies, loss of farmland and forced relocation of their communities, often to insufficient alternative accommodation. Exercising their legal rights to challenge the development of mines and defend the environment can lead to threats, destruction of property, intimidation and assassination at the hands of armed groups whose connection to the foreign multinational companies seeking to mine is difficult to establish. Last month Global Witness released a report which showed the country to be the most dangerous place in the world to be an environmental defender, with 60 activists murdered in 2022.

On September 2nd 2023, a public audience was held at the High School in Falan for local people to receive information about the proposed mine and express any ongoing concerns. Hans sent me video footage from the event, which shows a man in a white polo shirt taking the microphone and expressing his pride that in Falan the local people grow all the food they need to live healthily – yuca, maize, fish – because they look after the water and keep it clean. He asks the audience to help him in protecting the water supply against anything that might contaminate it. “What are you drinking?” he asks them, “What are you drinking? Are you drinking gold?” He goes on to say that he has received threats because of his opposition to the mine, but that if he has to die he will die defending his land.

The following day, a young man was found murdered in the neighbouring village of Lajas. Local newspaper El Cronista reported that the victim was Johan Ferney Aguilar, son of the environmental activist Wilder Aguilar who had spoken out the day before.

Johan Aguilar was 27 years old

It may never be possible to establish the connection between the murder and Minerales Santa Ana Colombia, a contractor of the Canadian mining company (Outcrop Gold and Silver) which owns the concession, but either way, the bargaining position of the mining company is strengthened by the perpetration of violence against families and communities who speak out.

When I saw that a pressure group based in the UK called ABColombia were advertising a panel at the Houses of Parliament in Westminster about corporate responsibility for environmental damage and human rights abuses in Colombia, I knew I had to go and find out more. The event included testimony from an environmental activist, Robinson Mejia, who opposes the development of an enormous gold mine (roughly the size of Manchester metropolitan area) at Cajamarca, on the other side of Tolima. In a familiar tale, a local farmer who opposed the mine was assassinated, and many others have received death threats. In a local referendum, 97% of voters chose to reject the development of the mine.

We also heard from a Colombian lawyer working to protect the rights of rural communities and from a representative of Corporate Justice Coalition. Whilst it was terrible to hear about the violence and intimidation suffered by people who speak up about the threats to their communities and the natural world, it was the story told by Corporate Justice Coalition that surprised and intrigued me. They warned that if the government side with the people of Cajamarca and decline to give AngloGold Ashanti the green light to start digging, they may quickly find themselves in court - in the World Bank’s International Center for Settlement of Investment Disputes (ICSID) in New York, to be precise.

There are roughly 800,000 Wayúu people living between Colombia and Venezuela

If the security situation in Colombia is making it harder to ensure basic human rights and to protect the incredible diversity of natural life which Colombia currently supports, the current political and legal situation at the national level offers hope. In 2022, Colombia elected its first progressive president, Gustavo Petro, a social democrat who campaigned on promises to transform the country. He campaigned on an ambition to spearhead a new anti-extractivist movement in Latin America. One of Petro’s most eye-catching promises was to stop giving new licences for petroleum exploration in the country.

Meanwhile, environmental activists are having some success in using the courts to seek protection from abuse by corporations. Colombia’s courts have delivered some significant victories for progressive causes in recent times, such as ruling in favour of free access to abortion. In 2017, the Constitutional Court ruled in favour of the Wayúu, an indigenous group in the north east of the country, against mining giant Glencore. Glencore, the world’s largest commodity trader, is headquartered in Switzerland and listed on the London Stock Exchange. The court ruled that Glencore’s use of a branch of the Rancheria River to service a new pit at the Cerrejón coal mine breaches the local Wayúu people’s rights to health, water and food sovereignty.  

Cerrejón was opened in 1985 in the harsh climate of La Guajira, a desert region whose indigenous tribes rely on seasonal rains to survive. The Wayúu have suffered displacement and famine over several decades as a result of drought, and 18 of their 25 communities have been displaced. Since 2011, the region has been in the grip of a particularly fierce drought. It is estimated that 5,000 Wayuu children died from lack of access to safe drinking water in the decade preceding the judgement.

In recent years the Wayúu have learnt water conservation techniques that present an opportunity for them to continue to live in their ancestral home. The court’s judgement appeared to be another lifeline for one of Colombia’s most vulnerable and abused minority groups. Unfortunately, victories like these are under considerable threat of being swept away as a result of legal challenges held at investment protection tribunals far from Colombia, the majority of which are held within ICSID.

Corporations suing states

The developing national consensus in Colombia regarding the need to protect the human rights of rural communities and safeguard the country’s unique ecosystems is under threat from supranational investment protection arrangements. Decisions made by the supreme court or policies mandated by the people and enacted by the government to protect the environment and defend basic rights of Colombian citizens has resulted in the country being sued. In the increasing number of these cases the country may be liable not only for investment consequently lost by foreign companies but also for the loss of their projected future profits. These legal threats are having a chilling effect on government policy and are being used as bargaining chips to secure mining rights where the law and the decisions of elected governments have sought to deny them.

The idea of a regime for investor-state dispute settlements (known by the acronym ISDS) was outlined by the banker and economist Hermann Abs in the 1950s in the context of post-colonial national liberation movements which threatened the capital of colonial and former-colonial powers in those states.[i] Under these arrangements, countries can be sued by foreign investors for state actions which affect their investments. Abs’ promotion of a global supranational legal framework sought to reduce the motivation for developed nations to intervene violently in the affairs of newly independent nations to protect their companies’ capital – think the Suez Crisis or the CIA-backed coup in Guatemala at the behest of the United Fruit Company (today rebranded as Chiquita).

Despite murmurings from some politicians and lawyers about the potential threat to national sovereignty that such agreements could come to represent, developing nations signed up in droves from the 1960s onwards, keen to secure foreign direct investment, and perhaps bargaining that it was safer to agree to negotiate directly with the world bank and investing companies than to risk invasion and clandestine interference.

The majority of ISDS cases are presided over by a 3-person tribunal at the World Bank in New York

Colombia and ISDS

Since the 1990s, the use of ISDS agreements by companies to sue countries has risen continually and substantially. The one country attracting the most cases of this type in recent years is Colombia. London Mining Network reported in March this year that there were 14 open cases brought against the conflict-ravaged state and 8 more in the pre-arbitration stage. The Colombian National Agency for Legal Defense of the State (ANDJE) reported in 2022 that claims from 8 of these cases totalled almost 2.5 billion USD, which almost 3% of Colombia’s total budget for 2023.

A US company called Sea Search Armada is trying to use the Colombia-US Trade Promotion Agreement to sue Colombia for 10 billion USD for not allowing them to look for a Spanish galleon loaded with gold that sank off the coast near Cartagena de Indias in 1708. If we include this claim in the total that is being demanded from Colombian state, the amount is roughly equal to the annual budget for education in the country. The sum claimed in several other pending cases is not in the public domain.

One such case is that brought by Glencore, which took full ownership of Cerrejón coal mine in 2021 in a 588 million USD deal. Glencore brought their lawsuit in 2021 and continue to operate the mine in denial of the Colombian court’s authority and in denial of the grave humanitarian crisis in La Guajira to which the mine is contributing. It is not known how much are the damages that Glencore is seeking, but there are concerns in Colombia that the independence of the courts is being tested by this legal action.

Cerrejón is the largest open-pit coal mine in Latin America

International campaign and sunset clauses

Cases are currently being brought against Colombia by invoking treaties with the US, the UK, Spain, Switzerland and Canada, with the most common source being Canada. 9 of the 14 open cases are related to mining, mineral exploration or secondary industries related to the extraction and refinement of fossil fuels.

Civil society actors have been urging the Colombian government to withdraw from these agreements. In May of this year, a group of 13 delegates from environmental organisations and charities from across the Europe and the Americas visited Colombia to learn about communities and ecosystems threatened by corporate lawsuits. They sought to convince policy makers and politicians of the need to remove ISDS from investment and trade treaties (rather than simply adjust the terms as Canada did for its 2007 FTA with Colombia). Their report suggests that government ministries were planning to review treaties that included ISDS, starting with the Colombia-Switzerland BIT.

One complication that Colombia finds itself in is that many BITs have ‘sunset clauses’ that determine the terms under which the treaty can be terminated. In the case of the Colombia-UK BIT either party to the treaty may unilaterally withdraw, but this would entail that the terms of the treaty remain in place for 15 further years. It is necessary for both parties to agree to terminate or renegotiate. The Colombia-UK BIT was signed in 2014 and covers a period of ten years, so that it is up for renewal in the coming year. With this in mind, charities in the UK are gearing up to campaign for the UK to remove ISDS provisions from the BIT with Colombia due for renewal next year. It remains to be seen what the response will be from corporate lobbyists.

Herman Josef Abs was the most powerful commercial banker of the Third Reich and later worked closely with Chancellor Adenauer to rebuild the German economy after WWII

Ramifications for the peace process

One of the primary arguments for the ISDS regime is it helps to promote investment flows. There are 3,300 agreements for ISDS currently in force worldwide. However, a 2017 study by the International Institute for International Development found no substantive evidence that ISDS provisions have increased FDI globally. Meanwhile, both Brazil and New Zealand have determined to remain outside of the regime, but have not struggled to attract investment. Furthermore, there is increasing awareness about the use of the system by corporations seeking to trample over democratically elected governments and the rulings of the courts, often to the detriment of human dignity and the health of the natural world. The case of the Wayuu is just one of many that highlights how extractive industries are placing an unsupportable burden on ecosystems in the context of climate change. The UN have declared that ISDS presents a significant threat to the global mission to protect the environment.

Claims made to ISDS tribunals are not only threatening the environment, but also the peace process in Colombia. According to Andrei Suarez-Gomez, Senior Fellow at the Centre for Religion, Reconciliation and Peace, the main drivers of the ongoing conflicts in Colombia include displacement of rural communities as a result of environmental collapse and violence. Peace in the country depends upon the successful protection of rural communities from intimidation and violence, whether it be carried out for the ends of leftist guerrillas or those of multinational corporations. The ISDS regime is not only supporting multinational mining companies to hold Colombia to ransom, but doing so at the expense of developing the conditions for peace.

Spare a thought for the citizens of Falan and of Cajamarca. Even if they stand firm in their opposition, in the face of terrible danger, it is not clear the government of Colombia will be so resolute when the lawyers for Outcrop Silver and Gold and for AngloGold Ashanti come calling.

[i] Claire Provost and Matt Kennard, Silent Coup: How Corporations Overthrew Democracy, 2023