3 years after Costa Rica kicked out gold-mining company, legal battle continues

January 14, 2014

Environmentalists in Costa Rica celebrate Nov. 24 as a milestone. It was on this day in 2010 that an Administrative Appeals Court shot down a projected $1 billion open-pit mining concession in northern Costa Rica.

While there will be no open-pit gold mining at Las Crucitas, as the project in Cutris de San Carlos was called, three years later, the legal battle over that concession continues.

Industrias Infinito, S.A., a Costa Rican subsidiary of Canada-based Infinito Gold, announced last October that it would sue Costa Rica in the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).

Industrias Infinito alleges the government violated the Costa Rica-Canada Bilateral Investment Treaty when it annulled the concession, costing the company $92 million in equipment, environmental impact studies, personnel salaries and other expenses during the initial phase of the project. Infinito Gold is now requesting the government of Costa Rica pay back $1 billion for lost profits.

The concession would have allowed the extraction of 1 million ounces of gold in the area near the Nicaraguan border, a business estimated at the time at $1.6 billion. The company claims that the suit is the largest Costa Rica has ever faced.

In response to Infinito’s pending lawsuit with the World Bank, an online petition is collecting signatures asking the Canadian company to drop the “aggressive” lawsuit against Costa Rica.

Yokebec Soto, a spokeswoman for Infinito Gold in Costa Rica, told The Tico Times the ICSID could take up to three years to issue a ruling.

In 2008, the company obtained a mining license after then-President Óscar Arias (2006-2010) and his environment minister, Roberto Dobles, declared the project of “national interest.” The decree gave permission to the Canadian company to remove trees in a 62-hectare forested area ahead of mine development.

The Administrative Appeals Court later ordered the Public Ministry to open a criminal investigation of Arias for having signed off on the project while environmental studies were still incomplete.

Recalling the Arias administration’s decree, attorney Edgardo Ayala, who is vice president of Unión por la Vida, an environmental group that fought the mine’s development, said, “That was one of the hardest times in my life.”

On Nov. 24, 2010,  the appeals court revoked Industrias Infinitos’ gold-mining concession, but the battle wasn’t over. Then-Attorney General Ana Lorena Brenes – whose job is to protect the government’s broad-ranging legal interests – appealed the court’s ruling. Opposition lawmakers subpoenaed Brenes, who admitted to receiving calls from Arias and his politically powerful brother, Rodrigo Arias, asking how she planned to proceed.

Industrias Infinito ultimately lost the appeal battle in November 2011, effectively ending the company’s legal recourse in Costa Rica.

“The annulment of those permits was a milestone for the justice system in Costa Rica,” environmental attorney Álvaro Sagot recalled. “But there still are other legal challenges for additional projects that continue to threaten the environment.”

Costa Rica’s legislature unanimously banned open-pit mining on Nov. 9, 2010, weeks before the Administrative Appeals Court issued its ruling on the Crucitas project.

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