US mining company KCA sues Guatemala for US$300 million

February 4, 2019: US mining company Kappes, Cassiday & Associates’ (KCA) made a US$300 million arbitration claim last December against Guatemala to the World Bank´s International Centre for Settlement of Investment Disputes (ICSID) over alleged violations of the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). Eleven international organisations have condemned the suit.

Since 2011, the communities of San José del Golfo and San Pedro Ayampuc have denounced the potential environmental and health impacts of KCA’s Progreso VII Derivada gold mine project. In 2016, Guatemala’s Supreme Court suspended KCA’s operations over failure to consult with Indigenous people, which the Ministry of Energy and Mines and the company have appealed to the Constitutional Court. Instead of respecting Guatemala´s democratic and judicial processes, KCA’s ISDS action pressures the government to restart the mine, or otherwise pay the company hundreds of millions of dollars in lost potential profits.

Local communities have maintained a peaceful encampment, known as ‘La Puya’, and have resisted repeated violent eviction attempts, suffering repression by state and private security forces. They argue that KCA and the state have failed to credibly evaluate the impact that the gold project would have on water supplies in a region with high levels of naturally-occurring arsenic.