On November 28, Panama’s Supreme Court declared a controversial copper mining project in the Latin American country unconstitutional. In a unanimous decision against the Canadian mining company First Quantum, the court suspended the extension of the mining contract, which had generated months of protests from citizens.
The court’s decision gave rise to celebrations by the tens of thousands of protesters who had shut down the country for more than a month over concerns about the long-term environmental impacts of the mine. The protests also called attention to the perceived corruption underlying the mine’s rapid approval process.
The decision marks an important victory for the anti-mining and environmental movement in Panama.
“People are celebrating this triumph of the Supreme Court ruling that declares Mining Treaty 406 unconstitutional,” explained Olmedo Carrasquilla, an environmental activist with the Panamanian environmental group Colectivo Voces Ecológicas, on Radio Temblor. “The people of Panama have stated a clear ‘NO’ to exploitation by the mining industry. [They] are celebrating because they want a truly supportive, popular, and ecological economy, and a country free of corruption.”
The original contract, which had been approved in the middle of the night and enacted on October 20 by President Laurentino Cortizo, granted the Canadian mining firm a twenty-year lease for the lucrative copper mining project on the country’s Caribbean coast, with the opportunity to extend the contract for another twenty years. The mine has been operating since 2019.
Opposition to the mining contract highlighted growing popular frustration with corruption and the political establishment in Panama.
Over recent years, the perception of corruption in Panama has intensified, with more than 56 percent of the population stating that corruption has grown worse in recent years. This growing concern with corruption has contributed to major popular mobilizations between 2021 and 2023, and it is likely to be a main issue in the upcoming election scheduled for May 5, 2024.
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Protesters in Panama City playing musical instruments in a protest against the mining contract, October 2023.
In response to the Panamanian Supreme Court’s ruling, the Canadian company is set to bring the conflict to international arbitration through the International Center for the Settlement of Investment Disputes (ICSID). This is a common tactic used by transnational corporations that seek to recuperate their investments in controversial projects.
One of the requests for arbitration was filed under the Canada-Panama Free Trade Agreement, which was signed in 2010 and went into effect in 2013. Among the measures to promote free trade, agreements such as this one also provide measures to open arbitration for companies to protect their investments.
Mining companies have used other regional free trade agreements to protect their investments, but mining companies have often been involved with acts of corruption.
A prime example is Kappes, Cassidy, and Associates, a Reno, Nevada-based mining firm and former owners of the Progreso VII Derivada mining project, (commonly known as El Tambor) just outside of Guatemala City, Guatemala.
In 2018, the U.S.-based firm took the Guatemalan government to arbitration for $300 million after a gold mining project in the community of San José del Golfo was suspended and eventually closed in May 2018. The project was shut down due to irregularities in the company’s environmental impact report presented to the Guatemalan government, as well as the company’s failure to consult the residents in the community.
The presence of the mine led to the eleven-year resistance from residents of the communities around the project which became known as La Puya, or "thorn." The protests gained international recognition for their permanent presence outside the mine’s entrance, where they protested the impact of the mine on their water and environment.
Canadian mining firm Pacific Rim challenged the government of El Salvador over mining interests in 2009. In 2018, El Salvador declared all metallic mining projects illegal.
It could be years before First Quantum and Panama resolve this conflict over the copper mining project, but for now, Panamanians will take the victory.