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February 22, 2024

Mine Closure: Panama’s Reformation of Labor Rights

By: Young Seo Kim, ABA ROLI Intern

Last December, Reuters reported that the government of Panama had announced that it would start the process for definitive closure of the Cobre Panamá mine. This came after the multi-year contract with First Quantum was ruled unconstitutional by the Supreme Court of Panama. The Cortizo administration did not take action until a recent press release from Jorge Rivera Staff, Minister of Industry and Commerce. Panama’s action plan is divided into three strategies, the immediate and definitive closure of the mine, the defense of the state against international arbitration, and the sustainable replacement of mining in the national GDP. This drastic change is not going to be easy for Panama as the mining industry compromises 7% of Panama’s GDP and equals 1% of the global output for copper used for electric vehicles. Nevertheless, the government of Panama needs to take measures that also ensure the protection of the environment and labor rights, and employ those effected with the definitive closure of the mines. 

According to a report of the IGF Mining Policy Framework Assessment from 2020 in Panama, Panama’s Mineral Resources Codes are outdated and promote a high-risk working environment. It also noted the lack of proper inspections, monitoring of findings, and implementation of sanctions if laws are not followed. First Quantum’s Cobre Panamá mine lacks adequate oversight in the fields of the environment and workers are frequently subjected to incurring health conditions and experiencing insecurity. In addition, IndustriALL Global Union wrote a letter urging First Quantum’s CEO Tristian Pascall to guarantee and respect the right to the freedom of association of workers. Anti-union policies of the company suppress workers’ rights to freely express themselves and to advocate for living wages. Due to a lack of publicly available information, it is uncertain wages mining workers receive, but it is certain they are lower than the legal minimum wage.

With the mine’s definitive closure, around 40,000 people are guaranteed to lose their jobs. However, the government of Panama has not announced measures that it will take to provide jobs to those who are directly affected by it. In the coming months, Panama could potentially face even higher numbers of unemployment. Finding alternatives to the mine with fewer exploitative means to laborers and the environment could be key to Panama’s economic recovery. At the same time, the move will help Panama restore its image with international corporations that are presently reluctant to invest in Panama after the closure of Cobre Panamá.

Despite the Panama Supreme Court’s recent efforts toward environmental conservation and protection of human rights, challenges in these areas persist. Alongside the US Department of State Bureau of Narcotics and Law Enforcement Affairs, the ABA Rule of Law Initiative (ABA ROLI) previously operated a multifaceted rule of law program in Panama. The program placed an emphasis on promotion respect for human rights and due process among the nation’s law enforcement entities. ABA ROLI has also assisted with the country’s transition to an oral, accusatorial trial system by training judges, prosecutors, defense attorneys, police, and forensics experts. The programs prepared these stakeholders to assume their new roles under the accusatorial system by developing bench books and other resources that provide step-by-step guidance on courtroom proceedings and other activities. 

Nevertheless, the executive and legislative branches of Panama must ensure greater secuity of its people’s labor rights while simultaneously conserving the environment. Initiatives such as ABA ROLI’s Combatting Forced Labor in Pará, Brazil program  provide a strong example of actions that could be taken to protect human rights while also reformimg labor laws to ensure a safe working environment. 

With less than six months left before the nation’s presidential elections, set to occur in May 2024, the next Panama president should address the demands of the protestors by announcing a clear stance on the mining crisis and ways to increase economic growth. Importantly, the president should address strict sanctions against forced labor and the destruction of the environment and provide a high-standard legal framework in labor to provide a clear guideline to protect worker rights.

Learn more about ABA ROLI’s work across Latin America and the Caribbean.

The materials contained herein represent the opinions of the authors and editors and should not be construed to be those of either the American Bar Association unless adopted pursuant to the bylaws of the Association. Nothing contained herein is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. These materials and any forms and agreements herein are intended for educational and informational purposes only.