PANAMA Law and Practice Contributed by: Roy C Durling, Arias, Fábrega & Fábrega
their activities and will be fined if they breach their obligations. 2.7 Environmental, Social and Governance (ESG) Guidelines and Regulations ESG guidelines are not new in Panama. The financial sector has been following them for some years already. In the case of mining, Min - era Panama, S.A. has adhered to the guidelines of its holding company, First Quantum Minerals Ltd. 2.8 Illegal Mining Illegal mining has become a problem in the last few years. Panamanian newspapers have reported that, as of August 2024, there had been 250 instances of illegal mining. In 2023, 60 cases had been reported. Most of the reported cases are in the area surrounding Cobre Panama. The majority of the instances are in the form of rudimentary placer gold mining in the rivers sur - rounding the Cobre Panama area and others that flow into the Caribbean Sea. These illegal activi - ties are affecting national parks and sources of water. Our environmental authorities and police are try - ing to prevent illegal mining. Our law provides for the possibility of criminal sanctions if the ille - gal mining causes harm to the environment. In addition, the CMR punishes these activities with fines of up to USD250,000. 2.9 Good and Bad Examples of Community Relations/Consultation Impacting Mining Projects Until recently, the Cobre Panama project had been regarded as a success story in terms of its environmental and community relations, as well as its consultation efforts. However, as a result
of the Supreme Court of Panama’s ruling that the Cobre Panama concession was unconstitution - al, Cobre Panama had to close its operations. It is important to emphasise that this outcome was not due to poor community relations. Minera Panama, S.A. (the holder of the Peta - quilla copper concession, also known as Cobre Panama) entered into agreements with the communities surrounding its project provid - ing for investment in facilities and infrastruc - ture. According to information posted on its website, Minera Panama, S.A. had invested at least USD44 million over the past ten years in infrastructure projects benefitting 22 communi - ties surrounding the Cobre Panama mine. Due to the termination of its operations in Panama, it is anticipated that CSR efforts on the part of Minera Panama, S.A. will end. On the other side of the spectrum, the Cerro Colorado project was not successful in its com - munity relations. Until 2012, the state held title to the concession to the Cerro Colorado deposit, when a law (Law No 11 of 2012) was passed cancelling the concession and prohibiting further mining activities in the area. From the 1970s, the government sought the co- operation of international mining companies for the purpose of conducting exploration activi - ties in Cerro Colorado. In the 1980s, the project faced opposition from environmentalists and local indigenous communities. The opposition did not abate even though the mining activities in the area ceased or were reduced. The gov - ernment continued to seek the assistance of international mining companies in the 1990s and into the early years of the 21st century, but the opposition from local indigenous communities continued until 2012, when the government had to adopt Law No 11 of 2012, which effectively
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