{"id":43565,"date":"2023-12-01T12:40:05","date_gmt":"2023-12-01T17:40:05","guid":{"rendered":"https:\/\/www.geopoliticalmonitor.com\/?p=43565"},"modified":"2023-12-01T12:40:05","modified_gmt":"2023-12-01T17:40:05","slug":"supreme-court-ruling-lands-a-blow-against-mining-interests-in-panama","status":"publish","type":"post","link":"https:\/\/www.geopoliticalmonitor.com\/supreme-court-ruling-lands-a-blow-against-mining-interests-in-panama\/","title":{"rendered":"Supreme Court Ruling Lands a Blow against Mining Interests in Panama"},"content":{"rendered":"

Panama\u2019s Supreme Court issued a historical ruling on 28 November. After deliberating for less than a week, the judiciary of the Central American country determined that a controversial and very unpopular contract between Canada\u2019s\u00a0First Quantum Minerals<\/a>\u00a0and the government of Panama is \u201cunconstitutional.\u201d While the dust still needs to settle, and repercussions are expected, including potential legal actions by First Quantum, the decision is a significant victory for the Panamanian environment and the people\u2019s voice.<\/p>\n

 <\/p>\n

How Did We Get Here?<\/em><\/strong><\/p>\n

The situation commenced on 20 October, when the Panamanian Parliament passed a bill approving a contract between the state and First Quantum. The same day, President Laurentino Cortizo signed\u00a0Law 406 (Ley 406)<\/a>, which approved the contract. In a 20 November press release, First Quantum highlighted its mining operations\u2019 contributions to the Central American country. The \u201coverall economic contribution\u00a0<\/a>of the mine to the State of Panama is estimated at more than $50 million per week, equivalent to around 5% of annual GDP.\u201d As\u00a0Geopolitical Monitor<\/a>\u00a0has previously discussed, the agreement awarded First Quantum\u2019s Minera Panama (the subsidiary company) control of the\u00a0Cobre Panama copper mine<\/a> for 20 years.<\/p>\n

The contract was not well received by the public due to environmental considerations and because local communities were not consulted. Massive protests ensued. President Cortizo announced that all new mining negotiations and permits would be\u00a0suspended<\/a>\u00a0to calm the population. When that strategy did not work, he announced a referendum, scheduled for 17 December, where people would decide the future of Cobre Panama and the contract with First Quantum. That did not work either as the protests continued.<\/p>\n

Several protests occurred in the capital, Panama City, where\u00a0government buildings<\/a>\u00a0were ransacked. Moreover, major highways have been blocked, including the vital Inter-American highway. According to the Panamanian media, the\u00a0Bocas del Toro<\/a>\u00a0and Chiriqui provinces were isolated from the rest of the country, so trucks with gas and other necessities could not arrive.\u00a0Tourism<\/a>\u00a0has also been severely affected. Meanwhile, blocking the roads meant trucks with\u00a0agricultural products<\/a>\u00a0could not reach major cities, including the capital; food prices skyrocketed.<\/p>\n

One critical development is that Punta Rinc\u00f3n port, Eastern Panama, built and operated by Minera Panama to transport the copper, has been the target of protests (including by sea).\u00a0On 20 November<\/a>, the company announced that Minera Panama \u201chas further ramped down operations at Cobre Panama to one remaining ore processing train. Without shipments arriving at the mine\u2019s Punta Rinc\u00f3n port, it expects to run out of supplies for the on-site power plant during the week commencing 20 November 2023.\u201d The company accused \u201cthe ongoing presence of an illegal blockade of small boats at the Punta Rinc\u00f3n port\u201d which \u201ccontinues to prevent the delivery of supplies that are necessary to operate the power plant.\u201d The ramping down of the operations is also a prudent move to minimize potential violence. Protesters reportedly\u00a0attacked buses carrying Minera Panama workers<\/a>\u00a0in late November.<\/p>\n

Panamanian civil society also turned to the law, not just protests, to stop the controversial contract. Lawsuits were submitted to the Supreme Court of Panama alleging that Law 406 was unconstitutional. \u00a0The Court commenced its deliberations on 24 November, and by 28 November, it ruled on their behalf.<\/p>\n

\u00a0<\/em><\/strong><\/p>\n

The Fallout: Domestic Implications<\/em><\/strong><\/p>\n

Let us first discuss the fallout of this historical ruling from a domestic perspective. After the verdict was made public,\u00a0President Cortizo<\/a>\u00a0gave a speech to the country, explaining that \u201cas soon as we receive a formal communication of the ruling\u2026 we will publish it intermediately in the Gazeta Oficial [the state\u2019s newspaper] and we will commence a transition for an ordered and secure closing of the mine.\u201d The decision also forced a shake-up of the government as\u00a0Commerce and Industry Minister Alfaro Boyd<\/a>\u00a0announced his resignation on 30 November, two days after the ruling; he was replaced the same day by\u00a0Jorge Rivera Staff<\/a>.<\/p>\n

As for the situation on the ground, the government is eager for the protests to end and for people to return to work. Education Minister Maruja Gorday de Villalobos called for teachers to return to class to finish the school year. The request was also a warning, as the Education Ministry was looking to apply \u201cadministrative actions<\/a>\u201d against teachers who do not return to work, including not paying them for the second half of November. After the ruling was issued, the same\u00a0Ministry announced<\/a>\u00a0that the measure will be suspended, and discussions with 24 teachers’ unions will begin to get teachers back in their classrooms by 4 December.<\/p>\n

Moreover, Panama does not have armed forces; hence, internal security and border patrol operations are carried out by the police and specialized agencies like the Air-Navy National Service (Servicio Nacional Aeronaval:\u00a0SENAN<\/a>) and the National Border Service (Servicio Nacional de Fronteras:\u00a0SENAFRONT<\/a>). SENAN has deployed cargo vessels to the country\u2019s islands in Chiriqui province to transport over\u00a0125,000 liters of milk<\/a>\u00a0meant for the capital. SENAN aircraft have been used to evacuate and\u00a0transport medicine<\/a>\u00a0to that province.<\/p>\n

As of 25 November,\u00a01,274 individuals\u00a0<\/a>(1,119 adults and 155 minors) have been arrested for their role in the protests. For a country with an estimated population of 4.3 million, the number of detained people gives an idea of the size of the protests and the level of discontent.\u00a0Ministry of Public Security Juan Manuel Pino\u00a0<\/a>argued that \u201cextremist and violent groups\u201d took advantage of popular discontent against Law 406 \u201cto foment chaos and commit crimes like vandalism, attacking people, theft\u2026 and damage to private and public property.\u201d The statements were likely a strategic move by the government to justify the security forces\u2019 operations. The government had previously stated that it respected the right to peaceful assembly and protest. By arguing that \u201cextremist and violent groups\u201d carried out violent acts, authorities can imply that crackdowns by security forces were aimed at \u201cviolent\u201d individuals, not the population in general.<\/p>\n

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First Quantum\u2019s Response<\/em><\/strong><\/p>\n

In a carefully worded statement issued after the Supreme Court\u2019s ruling, the Canadian company explained\u00a0on 28 November,<\/a>\u201cthe Company is reviewing the ruling and continues to reserve all its local and international legal rights in regards to developments in Panama.\u201d In\u00a0a previous statement<\/a>, the company had mentioned its intention, along with Franco-Nevada Corporation, to begin arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID). We can expect a lengthy and expensive legal case, or cases, about the Cobre Panama copper mine soon.<\/p>\n

Interestingly, in the company\u2019s recent statement, First Quantum once again mentioned the protesters “continued illegal blockades\u201d at Punta Rinc\u00f3n port and on the roads to the site. As a result, \u201cthe Cobre Panama mine has suspended commercial production.\u201d As previously mentioned, protesters have, in fact, blocked the Punta Rinc\u00f3n port. It is plausible to assume that protests around the mine, the port, and against mine employees will be used as evidence in the upcoming legal battle to justify any financial demands the Canadian company may have.<\/p>\n

Finally, the 28 November statement explains, \u201cthe security and safety of the workforce at Cobre Panama remain a priority for the Company.\u201d This is a curious statement as Minera Panama, First Quantum\u2019s subsidiary, has issued\u00a0an internal memo<\/a>\u00a0announcing that the contracts of approximately seven thousand mine workers will be temporarily suspended. While the company argues that it cares about the security and safety of its workers, their financial well-being is apparently not a major concern or priority. The\u00a0mine workers are protesting<\/a>\u00a0because they are concerned about losing their jobs.<\/p>\n

\u00a0<\/em><\/strong><\/p>\n

Looking Ahead<\/em><\/strong><\/p>\n

It is worth remembering that, as a way to calm the population, in late October, President Cortizo announced a referendum, to be held\u00a0on 17 December,<\/a>\u00a0about the controversial contract with First Quantum. Given the Supreme Court\u2019s ruling, it is unclear if the referendum will still occur. It would be logical for the referendum to happen since we can expect the majority of the population to vote against the contract. Hence, the Panamanian government can have more evidence to support its decision to shut down the mine in the upcoming legal battle with First Quantum.<\/p>\n

The protests in Panama are the largest social upheaval since a military junta governed the country from 1968 to 1989, which ended with the downfall of General Manuel Antonio Noriega. In other words, the scale of the protests across the strategically located Central American country has not occurred in over a generation. Similarly, the decision by the Panamanian Supreme Court is a significant victory for the country\u2019s population and environmental movement. Unfortunately, there are losers too, particularly the seven thousand employees of the mine, as First Quantum has \u201ctemporarily\u201d suspended their contracts. Looking to the future, we can expect a very lengthy legal battle to commence soon between First Quantum Minerals and Panama\u2019s government over the Court\u2019s resolution.<\/p>\n

The people’s will has been heard in Panama, and the environment around the Cobre Panama copper mine will be protected. Courts do not often side with the population against major corporations, particularly in the very profitable mining industry. Hence, this victory should be enjoyed, at least until Round Two begins.<\/p>\n

 <\/p>\n

Wilder Alejandro S\u00e1nchez\u00a0is President of\u00a0Second Floor Strategies<\/a>, a consulting firm in Washington, D.C. He is an analyst who monitors defense & security, geopolitical, and trade issues across the Western Hemisphere, Eastern Europe, and Central Asia.<\/em><\/p>\n

The views expressed in this article belong to the authors alone and do not necessarily reflect those of Geopoliticalmonitor.com.<\/em><\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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