Colombian Victory over Canadian Mining Corporation Claims

Colombia evades a USD $196 million compensation claim against the mining ban in Santurbán’s moorlands.

Colombia will avoid making a monetary payment to Canadian mining multinational, Montauk, previously known as Galway, which had demanded compensation of USD $196 million. The company had sued Colombia in the aftermath of the state’s decision to ban mining in the high-altitude moors of Santurbán, an area where the multinational had mineral extraction operations. The National Agency of Legal Defense of the State, under the leadership of acting director, Jhon Camargo, championed the case in its final stage before the International Centre for Settlement of Investment Disputes (ICSID). This international court handles the investment conflicts that companies bring against countries, which they consider violations to investment treaties.

How Does Colombia Deal With Existing Free Trade Agreements?

In this dispute, Montauk had alleged a violation of the free trade agreement between Colombia and Canada, after the National Environment Ministry defined the limits of the moor in 2014 and imposed a mining ban in the region. Earlier this year, Colombia received similar news when the ICSID also refused the claims of another Canadian mining company, Red Eagle, which also had operations in Santurbán and had filed a claim for USD $130 million.

According to Camargo, in both cases — Montauk and Red Eagle — ICSID found that Colombia had not violated its treaty with Canada. “The arbitration court noted, in line with the decision made in the Red Eagle case, that the ban on mining in moors does not violate the free trade agreement with Canada, as it is clearly a legitimate regulatory measure, implemented without any discrimination,” explained Camargo. The moor of Santurbán includes a vast natural region, part of an intertropical mountain ecosystem, distinct because of its diverse fauna and ecological importance, according to the Ciar Global portal. Numerous sources of water, providing a substantial supply to Santander, originate from the moor.