In 2016, Canadian mining company Eco Oro filed a claim for compensation against Colombia after a series of regulatory measures undertaken by the government to protect the páramo ecosystem. The company alleged that the measures deprived Eco Oro of its mining rights under a 2007 concession contract for the exploration and exploitation of precious metals and associated minerals. The company argued that Colombia breached its obligations under the Free Trade Agreement (FTA) through unlawful and indirect expropriation of its investment and for failing to accord the company’s investment the minimum standard of treatment. Eco Oro sought compensation in the amount of USD 696 million. The filing alleged that Colombia breached Article 811 of the FTA relating to expropriation, as well as multiple aspects of Article 805 relating to the customary international law minimum standard of treatment of aliens, including fair and equitable treatment and full protection and security. On September 9, 2021, the tribunal found Colombia to be in breach of the FTA and Eco Oro entitled to damages. The tribunal decided that there was no breach of Article 811 as the regulatory measures protected a legitimate public welfare objective and were adopted in good faith. However, the tribunal found Colombia to be in breach of Article 805 given the government’s delay in delimiting the Santurbán Páramo and its failure to comply with constitutional obligations to protect the ecosystem at the time of the company’s investment. The company had legitimate expectations to undertake the mining exploitation activities in its concession. The tribunal found Colombia’s conduct to be arbitrary and disproportionate, damaging Eco Oro without serving any apparent purpose. The tribunal concluded that Eco Oro is entitled to damages, which will be decided on a later date upon further input from the parties.

Key environmental legal questions:

Claims arising out of a series of regulatory measures aimed at protecting the páramo ecosystem, affecting a company’s mining concession.