How Much Does Gold-Plated Corporate Sovereignty Cost? $1 Billion Or About 2% Of A Developing Country's GDP
from the taking-from-the-poor,-giving-to-the-rich dept
Last week we wrote about the rising threat of corporate sovereignty, known more obscurely as “investor-state dispute settlement”, that allows companies to sue countries for alleged loss of future profits. Just how grave that threat is for developing nations can be gauged by the following, reported by Tico Times:
Canadian gold-mining company Infinito Gold Ltd. announced its intentions to go forward with a $1 billion lawsuit against Costa Rica over the retracted Las Crucitas open-pit gold mining concession in northern Costa Rica, in a statement released on Friday.
The contract was withdrawn for largely environmental reasons:
Costa Rica and the Canadian mining company have been ensnarled in a protracted legal battle over the canceled Las Crucitas project in Cutris de San Carlos, Alajuela, since environmentalists and locals decried the loss of virgin forest and health concerns over leeching chemicals contaminating drinking water.
Initially, the company fought the decision using local courts, but when it lost there, it made use of corporate sovereignty to take its complaint to a supra-national tribunal, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID):
Infinito has been rattling its saber over a potential ICSID arbitration after the company lost its appeal in Costa Rica’s Constitutional Chamber of the Supreme Court, known as the Sala IV, in November 2010.
Now, $1 billion is a lot of money by anyone’s reckoning. But for a country like Costa Rica, whose Gross Domestic Product (GDP) is estimated to be around $46 billion for 2012, an award of $1 billion against it would represent about 2% of the country’s entire annual economic activity, in a land where 25% of the population live below the poverty line.