Water Defenders v Big Gold – a real life David and Goliath story with a happy ending

March 16, 2021

     By Duncan Green     

Guest blog by Robin Broad and John Cavanagh, co-authors of The Water Defenders: How Ordinary People Saved a Country from Corporate Greed, which is published next week

The debate over development, so vibrant in the 1960s and 1970s, is being reinvigorated around the world with the rise of self-proclaimed “water defenders.”  And, while largely off many people’s radar, that debate has ushered in surprisingly hopeful policies in El Salvador and elsewhere.

We have spent time during the past decade travelling through the ancient mountains of northern El Salvador. There, over one-hundred years ago, a gold-sniffing Boston-born metallurgical engineer named Charles Butters found rich veins of gold.  Banished from Nicaragua by the revolutionary Augusto Sandino, Butters perfected the use of cyanide to extract gold from the surrounding rock and reaped large profits in northeast El Salvador. A century later, the cyanide-laced stream beneath his mine is not only lifeless but also an eerie rusty-orange as the iron exposed by mining continues to leech into the water and soil.  It is the one place in El Salvador that leaves us with nightmares.

With the rapid rise of gold prices two decades ago, global mining companies sought to re-enter northern El Salvador. Frontline communities, first excited at the prospect of promised jobs and economic growth, began to educate themselves on the impacts of mining on their already scarce sources of water.  They studied these toxic consequences of mining at the Butters site and in nearby Honduras.  What they learned shocked them and they built a national coalition of groups – The National Roundtable Against Metals Mining (La Mesa) – under the slogan “water not gold,” and pressed their government to ban mining. 

La Mesa – and the scientific evidence on which they based their opposition – was powerful enough to convince the government to put in place a moratorium on new mining licenses to give it time to study the issue. And that move was enough to prompt two global mining companies to sue El Salvador in a secretive, corporate-biased tribunal housed in the World Bank Group in Washington, DC.

At that point, the water defenders of El Salvador reached out to us and other international allies to help counter the lawsuits. An epic battle ensued on the ground and in the World Bank’s court, which we narrate in our new book, The Water Defenders: How Ordinary People Saved a Country from Corporate Greed.  Much of the book shares the voices of the water defenders from our decade of work with them.

Thanks to a trove of internal mining company documents, the book also looks behind the usually closed doors of global corporations to chronicle the arguments and actions of the mining companies to convince El Salvador that it would be “unjustifiable” to forgo the literal gold mine under the soil.  The CEO of one of the mining companies (Pacific Rim, later purchased by mining giant OceanaGold) suing El Salvador labelled the groups that opposed mining, including Oxfam, as “rogue,” charging that “anti-development NGOs  fomented anti-mining by spreading lies.”

But what’s a global corporation to do beyond name-calling – as deadly as that proved to be in El Salvador? You guessed it: go with the purported science of economics. Pacific Rim hired a former Salvadoran finance minister who had worked at the World Bank, Manuel Hinds, to do a “costs and benefits” study of mining.  Depending heavily on the magic of unsubstantiated assumptions, Hinds spun an estimate of 450 jobs created at the company’s proposed main mine during the most labor-intensive year of construction into the claim that the mining company would generate 36,000 jobs in El Salvador. In our book, we dive into his calculations – suffice it to say that somehow one mine became three and the alleged multiplier effects went wild.

Deploying the slogan “water is life,” the Salvadoran water defenders brilliantly – and courageously – rebutted the false claims and initiated creative educational campaigns on the dangers of mining, using art, theater, and story-telling on community radio. They even held a large public debate with a mining executive.

In the process, that nation debated the big issues: What is progress?  Could gold ever be mined safely in that country, with its fragile ecosystems and one main river system that provides water for over half of the country’s population?  What is the trade-off between short-term financial rewards for the few and long-term environmental safety for the many?  Should corporations be allowed to sue governments in such a global venue and for future profits foregone, not just for costs incurred?  How does one build effective domestic and global social movements to counter excessive corporate power?  Who might emerge as unlikely allies in choosing water over gold?

In March 2017, the national legislature in El Salvador – a country with glaring political divides – voted unanimously to ban all metals mining to save the country’s rivers. 

Remarkably, in March 2017, the national legislature in El Salvador – a country with glaring political divides – voted unanimously to ban all metals mining to save the country’s rivers.  Charles Butters must have turned over in his grave.  And, just as remarkably, along the way, the two mining companies that launched the lawsuits in the World Bank tribunal lost their cases. 

And, no, El Salvador is not an “outlier” in choosing water over gold. In our book, we chronicle the spread of strong grassroots movements elsewhere, successfully pressuring their governments into restrictions on mining in Costa Rica, Panama, Argentina, Colombia, and the Philippines. Most recently, in February 2021, the inhabitants of Cuenca, Ecuador voted overwhelmingly to ban mining in its five watersheds. 

The water defenders of El Salvador and elsewhere remain vigilant – aware that the economic slowdown induced by the pandemic and its resultant fiscal crises across the globe are energizing the mining-at-any-cost forces. However, so unpopular is mining in El Salvador that in the most recent 2019 presidential and 2021 legislative elections, it was not even an issue.   

Some development scholars and practitioners may recall the vibrant debates of the 1960s and 1970s well. Based on what we have been a part of over the last decade, we would suggest that the water defenders of El Salvador and their allies elsewhere are bringing back that vibrancy – and are offering hopeful development priorities, policies, and trajectories for the future.

March 16, 2021
Duncan Green