Panama: Supreme Court declares “unconstitutional” the mining contract that is the focus of the crisis

The Supreme Court of Justice of Panama declared this Tuesday “unconstitutional” the contract that renewed the exploitation concession of the largest open pit copper mine in Central America, a decision that is expected to end a national crisis and open a front of international arbitrations by the concessionaire, the company Minera Panamá, a subsidiary of the Canadian First Quantum Minerals (FQM).

By “unanimity”, the plenary session of nine magistrates headed by President María Eugenia López Arias declared unconstitutionality in response to two appeals presented against Law 406, approved on October 20 by the unicameral Parliament and the Executive of President Laurentino Cortizo, and which contains contract.

“The judges who make up the plenary session have unanimously decided to declare unconstitutional the entire Law 406 of October 20, 2023. The above means that the aforementioned law is expelled from the regulatory system that governs the country.“, declared the president accompanied by the rest of the plenary session in a statement broadcast live.

Quoted by EFE, López Arias indicated that once “sentence executed“, will proceed “to issue it for publication in the Official Gazette”.

“We take this opportunity to send a congratulatory message to Panamanians, on the occasion of commemorating 200 years of independence today, may God bless Panama”, the judge closed in reference to the celebration this November 28 of the 202 years of Panama’s declaration of independence from Spain.

Law 406 regulates the exploitation of the Cobre Panamá mine, an investment of around US$ 10,000 million, according to the company, which exports mineral mainly to the Chinese market and was built in the heart of the Central American Biological Corridor causing irreparable damage to the ecosystem. according to environmental groups that have been fighting against the enclave for years.

With this ruling, the contract “ceases to exist“, the former Panamanian attorney general Ana Matilde Gómez and the constitutional expert Ernesto Cedeño had told EFE about this possibility, and consequently the Executive will have, in the short term, to order the cessation of operations of the mine, which is not what same as its closure, a process that will take years according to experts.

The president will abide by the ruling

The Panamanian president reacted to the ruling of the highest judicial body by emphasizing that he will abide by the order.

“As President of the Republic, always respectful of the separation of the powers of the State and our Constitution, I receive and abide by the decision of the Supreme Court of Justice, expressed in its ruling today, on Law 406 of the mining contract“Cortizo stated in a brief statement.

“I reiterate to the country my total conviction about the value of justice, as the backbone of democracy“concluded the president, highly criticized for the speed with which this law was approved, in just three days.

Minera Panama has already notified of its intention to present two lawsuits against Panama before the International Center for Settlement of Investment Disputes under the Free Trade Agreement between Panama and Canada, as reported on November 26 by the Panamanian Government, which said it was ready to defend the State.

The mining company responded last night to the statement from the Panamanian Government, ensuring that the objective of the notification was “merely comply with the formalities” with the purpose “to open a dialogue period of at least 90 days between the parties”.

This decision is expected to put an end to the crisis unleashed by the express approval of the contract law by Parliament and the Government, which has left four dead, a teaching strike that left nearly 800,000 students without classes in the last month, and an economic disaster due to road blockades led by indigenous groups and unions.

The rejection of the mining contract also generated the largest peaceful protests in decades in Panama, led by young people, which were ruined by “infiltrators” that caused disorders and a police response that was called excessive by the Ombudsman’s Office.

First Quantum ratifies commitment

First Quantum said Tuesday it remained committed to regulatory compliance in its operations in Panama, after the country’s Supreme Court declared the Canadian miner’s contract to operate a lucrative copper mine in the Central American country unconstitutional.

“We want to ratify our unwavering commitment to regulatory compliance in all aspects of our operations within the country. We will comment further as more details about the ruling become public.”First Quantum reported in a statement released by Reuters.