Panamanian employers ask to protect legal security after ruling on mining

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  • Sat, 09/29/2018 - 20:24
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One of the main business associations of Panama said today that the judicial ruling that declares unconstitutional the law that endorsed a mining concession two decades ago is "worrisome" and affects the legal security of the country.

The Chamber of Commerce, Industries and Agriculture of Panama (CCIAP) said Friday in a statement that it is necessary to strengthen the legal security of the country, since it "depends on our ability to attract employment-generating investments (...) and the The Supreme Court must be the guarantor of this."

The Supreme Panamanian declared unconstitutional the "Contract Law 9 of February 26, 1997" that endorsed a concession for the extraction of gold, copper and other minerals granted to Canadian Minera Panamá in the Petaquilla area, a hill located in the district of Donoso, in the Caribbean province of Colón.

The ruling was issued after the Environmental Advocacy Center (Caim), an environmental NGO, filed an unconstitutional appeal against the law in 2009, considering that the bill was harmful to the Panamanian State and to the country's natural resources.

The CCIAP claimed on Friday that "it is worrisome that the decision on the process in question has taken almost a decade", and declared that this delay "confirms the purpose of continuing to promote the changes we promote in the administration of justice, through constitutional reforms".

The concession granted to Minera Petaquilla, which after several sales changed its name to Minera Panama, expired in February of last year, but the current government decided to extend it for another 20 years, until February 28, 2037, as published in the Official Gazette. 

Minera Panama, which belongs to Canadian First Quantum, is currently developing a project on the Caribbean coast of Panama known as Cobre Panama, which is considered the largest private investment in the country's history (6,300 million dollars) and employs more than 12,600 people.

The mine will start operations next year and is expected to export more than 320,000 metric tons of copper per year, equivalent to approximately 2,000 million dollars, according to the company.

"The ruling created unnecessary uncertainty in the largest foreign direct investor that has existed in the history of the country," said the Chamber of Commerce, chaired by Jorge Juan de la Guardia.

Both the mining company and the Panamanian government have said that the judicial ruling does not affect the Donoso copper mine because what is declared unconstitutional is the law that was passed to give legal certainty to the agreement and not the concession itself.

The Minister of Labor and Labor Development, Luis Ernesto Carles, said on Thursday that "the workers of the Cobre Panama mining project do not have to worry that their jobs are not at risk."

The environmental association, however, considered Monday in a statement that the "ruling implies that the extension granted to Minera Panama is null and void" because "the accessory follows the fate of the main issue."

The Donoso project also includes a 300-megawatt power generation plant, an electric transmission line, an international port and a mineral processing plant.

The mining sector represents 2.5 percent of Panama's gross domestic product (GDP), but the country's Mining Chamber estimates that it will reach 9.5 percent when Donoso begins its copper exploitation.


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