International Court Rules in Favor of Vulcan Materials
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International Court Rules in Favor of Vulcan Materials

Photo by:   Sasun Bughdaryan
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Fernando Mares By Fernando Mares | Journalist & Industry Analyst - Thu, 09/22/2022 - 16:17

The International Center for Settlement of Investment Disputes (ICSID) failed in favor of Vulcan Material in the Calica case, a long dispute that the company has sustained against the Mexican government since 2018 when it protested against the closure of its La Rosita property located in Quintana Roo. 

ICSID’s court ruled in favor of Vulcan Materials’ claim against the Mexican government for economic damages, which at the beginning were worth US$1.5 billion. As part of ICSID’s conclusions, the court determined that the La Rosita property was a fundamental element in the company’s operations in Mexico and that it is highly integrated with other properties of the company. At the time of writing, the company has not revealed the additional amount it will claim.

The court also approved the company’s petition for precautionary measures to forbid the Mexican government from taking any action that aggravates or extends the conflict between the parties. This measure includes verbal attacks against the company during President López Obrador’s daily morning press conferences. According to El Economista, López Obrador has mentioned the company over 26 times, accusing it of committing crimes against Quintana Roo’s environment. 

The dispute between Vulcan Materials and the Mexican government started in 2018 when the company started a legal dispute under the USCMA mechanisms, accusing the government of not complying with the obligation of fair and equal treatment for private foreign investment. Vulcan Materials has also filed proceedings for the cancelation of two port concessions in Punta Venado port. 

Despite reaching an agreement in 2022, when López Obrador offered the company to withdraw the lawsuit in exchange for resources to transform its property in Punta Venado into an ecotourism attraction, the federal government accused the company of defying the agreement after they noticed the company still carried out extraction activities. For this reason, López Obrador said he would take the company before the UN, which he did on Jul. 6, 2022 after filing before the UN Higher Commissioner for Human Rights, Michelle Bachelet. However, Vulcan Materials questioned this move as it did not receive a copy of the lawsuit and declared that the UN is not equipped to deal with these kinds of conflicts. 

Vulcan Materials assured that the federal government has launched a smear campaign against the company, accusing it of damaging the environment. Nonetheless, it has publicly demonstrated its environmental impact mitigation plan, which includes reforestation programs and evaluation of potential land modifications and geological characteristics to avoid polluting underground water deposits, as reported by MBN. 

Photo by:   Sasun Bughdaryan

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