Dear A.M. Costa Rica:
Regarding the Las Crucitas arbitration;
The initial meetings of the arbitration tribunal, addressing charges that Costa Rica breached terms of the Canada Costa Rica Bilateral Investment Treaty, are being held soon. The setting is the International Centre for Settlement of Investment Disputes.
By now, I’m sure everyone is aware and probably tired of the political mismanagement and extensive lobbying by special interest groups that has led us to this critical point, therefore I will not restate the history.
At these first meetings, the Ministerio of Comercio Exterior and its legal team representing the interests of Costa Rica will submit a jurisdictional objection to the tribunal, challenging the tribunals authority to preside over the case.
That challenge is the only hope for Costa Rica to avoid paying compensation costs to Infinito Gold. I’ll put this as simply as I can. Costa Rica will argue that the Las Crucitas issue was settled by the Costa Rican judicial system, and Infinito will argue that it did not receive “fair and equitable treatment” as described in the terms of the bilateral investment treaty and therefore seeks remedy with the tribunal.
There are other legal technical arguments that will be raised but suffice to say that Infinito’s case is strong.
The tribunal will (according to recent cases) note Costa Rica’s objection and will issue its decision after it hears submissions on the merits of the case at a later date.
Now to the cost.
Infinito’s claim is for $93,896,754 plus costs and interest. The company also asks for other such compensation as the tribunal sees fit. It is that claim that allows the tribunal to place a value on Las Crucitas on the day it was annulled. That value is easily in the $300-$400 million dollar range.
Gold was averaging around $1400/ounce at that time, and the value of Las Crucitas, if it were sold to another company, represented a fully permitted project with resources of 1.24 million ounces of gold in the ground. That value is almost 1 percent of Costa Rica’s GDP, money that could have been put to better use improving schools, hospitals and local infrastructure.
The allegations by special interest groups that an illegal donation was made to the Arias foundation and the ridiculous malfeasance charges laid against six environmental employees (eventually proved innocent) reduced Costa Rican politics to a level previously thought impossible.
These actions have only hardened Infinito’s resolve to see this case through to its rightful conclusion.
If Las Crucitas had been cancelled by the Abel Pacheco administration and termination costs paid to Infinito, which they are on record as stating, then Costa Rica would not be in this situation.
This international arbitration case is not an environmental issue. Infinito Gold would have utilized state of the art equipment. Infinito Gold was and is fully committed to protecting the environment. Its environmental impact assessment was approved and actually commended as exceeding requirements.
No, this arbitration is entirely about the fact that Infinito was encouraged to invest capital in Costa Rica, was given legal assurance by the Sala 1V that its project at Las Crucitas could legally continue, received presidential approval for the project and then had its concession annulled by a lower court and denied an appeal by the Sala 1V court which had previously approved the project.
It is now time for the Costa Rican people to ask the question, who is running Costa Rica, the duly elected government or special interest groups?
These special interest groups and the politicians who jump to their every whim must be held accountable when the compensation payment is determined.
$300 Million will take a lot of explaining.