Trade Agreements vs. Democracy

THE ANONYMOUS DEATH threats phoned to Archbishop Pedro Barreto and others in March told them to stop speaking out about the foreign-owned metals smelting plant in La Oroya, Peru.

Barreto, a Catholic archbishop of the Andean region that includes La Oroya, has been a leading advocate for the health of the 35,000-person town, which the plant has made one of the world’s most contaminated places: 99 percent of children there have dangerous levels of lead in their blood.

However, in an unconscionable move made possible by the 2009 U.S.-Peru trade agreement, it is the polluter who claims to be the victim. The massive New York-based holding company Renco Group Inc., whose subsidiary Doe Run Peru owns the smelter, last year filed an $800 million trade-tribunal lawsuit against the Peruvian government, claiming it violated the company’s rights by enforcing environmental regulations in La Oroya.

It’s one of a growing wave of such arbitrations being filed all over the world by extractive-industry foreign investors. In a similar case, the transnational corporation Pacific Rim has filed a $70 million case against El Salvador, after local communities and activists—four of whom have been murdered—opposed gold mining that could contaminate one of the country’s largest rivers.

The suits circumvent nations’ environmental laws by exploiting so-called “investors’ rights” chapters of trade agreements; such provisions are common in bilateral trade agreements, such as the U.S.-Peru pact, and regional agreements such as NAFTA.

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