Everybody Wins, Nobody Loses ... Except You and Me

The money that the State of Costa Rica will lose in the dispute over the failed concession of the Crucitas mine will come from taxpayer's pockets.

Wednesday, February 12, 2014

Editorial

During the 20 year period of the soap opera that is Crucitas gold mine, none of the individuals who are involved in one way or another have suffered any financial loss and many, on the contrary, have seen an increase in their income and their bank accounts. They include presidents, former presidents, ministers, former ministers, judges and other public officials, who, regardless of the nature of their involvement in the matter, carried on receiving their salaries on time and carried on collecting their juicy pensions.

Industrias Infinito, a subsidiary of Infinito Gold, is suing the Costa Rican government for $94 million lost due to violations of the agreement for the promotion and protection of investments between Costa Rica and Canada due to the cancellation of the concession that was granted to them for gold mining at the Crucitas mine near the border with Nicaragua.

The story begins in 1993 when the Canadian mining company Pacer Dome Incorporated obtained permission to explore an area near the village of Crucitas. In December 2001 the Ministry of Environment and Energy (MINAE) gave Industrias Infinito a mining exploration permit.

In subsequent years there were many administrative, legal and political actions, for and against the mining project, including most notably in 2002 a decree by President Abel Pacheco banning open pit mining, a decision taken by the Constitutional Court which states that despite this, Industrias Infinito can continue exploration, and in 2008 President Oscar Arias declared open pit mining to be of national interest, and that SETENA granted permission for the operation of the gold mine in Crucitas. In the same year the Public Ministry opened an investigation into that statement of national interest, which led to an indictment against former Environment Minister Roberto Dobles and other officials at the MINAE for malfeasance in the management and execution of the operating license given to Industries Infinite.

Finally, in November 2010, a court ruled that there were irregularities in the granting of permits given to the Canadian mining company to exploit the gold mine in Crucitas, ruling to cancel the concession.

Throughout the entire process conflicting decisions within the administrative, judicial and political spheres of Costa Rica have been detected. The project's eventual failure incited a reaction from the Chamber of Industries of Costa Rica, who summarized the situation in a press release: "This ruling overturns an initiative that has taken fifteen years of work for it to be realised as a productive company. These are fifteen years of paperwork and delays that only those who are or have been employers knows what it is like, a cross to bear."

What is truly unfortunate is that a project has been halted after such a long time. If, indeed, all those involved in granting approvals over the years were wrong, including the Sala IV court, as the contentious court case says, as a country we have failed very badly. What investor is going to trust any opinion, approval, permit, license, patent, grant, contract or any other form issued by the competent authorities if it can be challenged in the courts and contested or annulled because of mistakes, incompetence or failure arising from our very own public authority. This is known as legal uncertainty, allied with or in complicity with the uncertainty of incompetence. "

Beyond any environmental stance, it is clear that these conflicting decisions within the Costa Rican government have caused economic damage to Industrias Infinito, and it will be very difficult for the international court where the dispute will be settled now, to not see it that way. Costa Rica will pay many millions to Industrias Infinito, as it did recently to the Brazilian company OAS for canceling the construction of a road.

And none of the officials involved will pay an absolute penny, nor will they give back the salaries they earned during their management which can only be described as terrible. The money will come, as always, from the taxpayers, who are not all citizens, but merely the people and companies who pay taxes.

From various sources on the internet.



More on this topic

Cancellation of Crucitas Mining Concession Stands

November 2011

The First Chamber of the Supreme Court of Costa Rica has dismissed appeals filed by the company Industrias Infinito.

In November 2010 the Administrative Court ordered the cancellation of a mining concession to Industrias Infinito, a company that has invested $127 million in the project.

Crucitas Mine, Legal Uncertainty and Foreign Investment

November 2010

A 15-year, $127 million investment was suddenly halted by a court canceling a mining concession to Industrias Infinito in Costa Rica.

On Wednesday a court ruled that there were irregularities in the issuance of permits awarded to the Canadian mining company for exploiting a gold mine, and decided to annul the concession.

Costa Rican Court Cancels Las Crucitas Mining Concession

November 2010

A local court ruled to annul the concession previously granted to Industrias Infinito, and ordered the company to pay compensatory damages.

The court ordered the Costa Rican State and Industrias Infinito to pay environmental damages.

An article in Elfinancierocr.com noted that the ruling is not definitive, as another court (Sala Primera), must first resolve an appeal by Industrias Infinito.

Costa Rica: Court Sustains Measures Against Crucitas Gold Mine

June 2010

An appeals court maintained a series of precautionary measures hampering the development of Crucitas gold mine, owned by Infinito Gold.

The court’s decision was based on a “in dubio pro natura” principle, which implies prevention and precaution in favor of natural resources. The measures against the company will remain in place until a final ruling is issued.

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