REPORT: Defending Water and Land, Facing Million-Dollar Lawsuits: The Cost of Investor Protection in Guatemala
For Immediate Release
Press contact below
Guatemala City, Guatemala – On June 18, the Transnational Institute (TNI) and the Institute for Policy Studies (IPS) released a timely new report that reveals how the investor-state dispute settlement (ISDS) system has been used by mining and energy companies to sue Guatemala for hundreds of millions of dollars amid conflicts over local communities’ defense of water, land, and Indigenous rights.
Based on an analysis of arbitration claims filed against the country, the report shows who is bringing the lawsuits, how much in damages and future lost profits investors are seeking, which economic sectors account for the majority of these cases, and how this rigged system exacerbates the disparities between private corporations and the communities affected by their projects.
The report highlights how ISDS tips the scales in favor of private investors and corporate interests. While companies can resort to this powerful mechanism to seek millions in compensation when they believe that a government’s protection measures could negatively impact their investments or profit expectations, communities harmed by these projects lack effective access to justice and reparations.
The report also documents the so-called “chilling effect” of ISDS: the pressure that threats of arbitration exert on governments when they attempt to address environmental, social, or human rights issues.
Guatemala’s experience shows how this system can become an obstacle for communities defending their land and environment, and to public policy decisions aimed at protecting the environment and Indigenous rights.
Some key findings from the report:
- Since 2007, Guatemala has faced 13 arbitration claims, 9 of which were initiated under Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs).
- Investors have sought nearly $1.7 billion from the Guatemalan government.
- Arbitration tribunals have already ordered the government to pay more than $160 million to investors, an amount equivalent to more than three times the budget of the Ministry of Environment and Natural Resources in 2025.
- Over fifty percent of the claims are concentrated in the energy sector.
- Guatemala received its first arbitration claim from the mining sector over the suspension of the Progreso VII Derivado mine operated by U.S. company Kappes, Cassiday & Associates (KCA).
| Emblematic Cases When Investors Sue Their Own Country In 2021, Energía y Renovación Holding filed a $178 million lawsuit against Guatemala under an international treaty. The company, owned by Guatemalan partners, attempted to develop a hydroelectric project on Indigenous lands in the Yichk’isis (Ixquisis) Microregion of Huehuetenango despite the communities’ opposition expressed in a community-led “good faith” consultation. In 2025, an arbitral tribunal ordered Guatemala to pay the company $64.5 million plus interest and costs. La Puya: Seven Years of Arbitration over Resistance to Mining The U.S. mining company Kappes, Cassiday & Associates sued Guatemala for more than $400 million after the courts suspended its mining project in the municipalities of San Pedro Ayampuc and San José del Golfo for failing to conduct prior consultation with the affected communities. The Peaceful Resistance La Puya actively contributed to the government’s defense in the arbitration. In December 2025, the arbitral tribunal dismissed the company’s claim and ordered it to pay a portion of the government’s arbitration costs, although the government still had to bear legal costs amounting to millions of dollars. The Marlin Mine: The Chilling Effect Obstructs the Protection of Indigenous Rights In 2010, the Inter-American Commission on Human Rights granted precautionary measures in favor of 18 Mayan indigenous communities. The Commission ordered the Guatemalan government to suspend operations at the Marlin mine in San Miguel Ixtahuacán, in the department of San Marcos, operated by Canadian company Goldcorp, and to implement measures to ensure the life and well-being of the communities. However, the government’s fear of a multimillion-dollar ISDS claim influenced its decision to not suspend operations at the mine. |
The full report can be downloaded here: https://isds-americalatina.org/guatemala-eng/
More information about ISDS in Latin America and the Caribbean:
https://isds-americalatina.org/en/
For interviews or more information:
Jen Moore, Associate Fellow, Institute for Policy Studies – jen@ips-dc.org
###
Lea este aviso de prensa en español.
