economy

Arrayed against Fifer and Petaquilla are environmentalist, anti-corruption, farmer, labor, leftist and community groups, as well as clergy and lay people of the liberation theology strain of Catholicism. Three groups opposing the strip mine, the Comite Pro Cierre de Petaquilla, the Coordinadora Campesina por la Vida and the Comites Eclesiales de Base de la Costa Abajo de Colon, issued a joint communique complaining that "Petaquilla Minerals continues to devastate our forests, rivers, hills and ecosystems in general in order to take the mineral wealth abroad (to Canada) and leave some crumbs for businessmen and corrupt public officials who front for them, at the cost of the Panamanian government and nation, which will receive nothing."

Fifer and Petaquilla also have a copper concession in the area, which has been separated from the gold mine in a series of different subsidiaries and consortia. That project has been in big trouble since Fifer drove out the large Canadian-based multinational partner, Teck Cominco. In the wake of that break-up and delays in the development of the copper project, another large Canadian-based mining company, Inmet (which is a partner in the gold project) has made a hostile takeover bid for Petaquilla Copper, offering $2 per share. Petaquilla Minerals, which is under Fifer's tight control, owns part of Petaquilla Copper. The copper company management (Fifer et al) says it's studying the proposal but advises shareholders not to sell. At closing on August 7, the day this story was written, Petaquilla Minerals stock was selling at $1.12 and continuing a steep decline.

One of the things that Fifer has done well, by way of posting press releases in places like the Canadian securities markets' semi-official CEDAR database and planting false information on websites like the Panama Guide, is to dominate the English-language information that gets to international investors. Thus a criminal investigation arising from allegations that Fifer embezzled aid from the government of Spain to a museum in Penonome and put phantom employees on the payroll when he was governor of Cocle was first denied and then misrepresented as an innocent misunderstanding about something entirely different, and the case file remains buried and inaccessible in the Cocle courts and prosecutors' offices. But as far as the stock markets are concerned, Fifer's announcement of a February 2008 gold production start and subsequent failure to meet that goal, followed by the acrimonious breakup with Teck Cominco in the copper project, have been the driving factors behind the Petaquilla Minerals share price dive. The court ruling may accelerate the process.

Panamanian courts are based on the Civil Code legal tradition and thus the power of precedent isn't nearly so strong here as in jurisdictions using the Anglo-American Common Law system. However, there were a number of promises, some enshrined in contracts and some made less formally, wherein the Pérez Balladares administration purported to exempt certain foreign investors from various laws, particularly minimum wage, the right to organize unions and environmental protections. None of these promises have stood up to legal challenge and we can look to the government's failure to deliver on such as one of the principal reasons why the export processing zone at the former Fort Davis failed. (The biggest of the "other" reasons, the bane of almost all manufacturing in Panama, is high electricity rates.) While other cases had no direct bearing on Richard Fifer's gold mine, they did have a certain predictive value.

The expectation of an eventual court loss was probably the driving factor behind Fifer's decision to go ahead with his strip mine despite ANAM's prohibition, and whether the high court decision stops work is, as this article is written, still an open question.