WORLD BANK INVESTMENT PANEL REJECTS POLLUTION LAWSUIT AGAINST PERU

07/25/2016

The World Bank’s International Center for the Settlement of Investment Disputes (ICSID) unanimously rejected New York-based Renco Group Inc.’s lawsuit against Peru for neglecting environmental cleanup around a smelter in La Oroya. The group filed the lawsuit in 2011 for $800 million, claiming that Peru did not clean the soil around La Oroya as was promised in their original purchasing agreement. The company additionally accused Peru of not taking responsibility for prior pollution claims tied to the smelter site. The smelter was purchased in 1997 and was operated by Doe Run Peru, a subsidiary of Renco Group, until 2009. It was once one of the most diversified smelters in the world, handling gold, silver, lead, copper, and another dozen specialty metals. After dealing with financial difficulties, it is now controlled by its creditors and faces liquidation on August 27th, 2016. The ICSID rejected Renco’s lawsuit over lack of jurisdiction, but the company has indicated it will refile immediately. According to the Blacksmith Institute, La Oroya is one of the 10 most polluted places in the world. Despite the pollution controversy, Peruvian President-Elect Pedro Pablo Kuczynski has indicated his interest in reopening the smelter in the future. For the full story, see http://uk.reuters.com/article/us-peru-worldbank-renco-idUKKCN0ZY2C4