A new report from YLNM member group Mining Watch Romania reveals how free trade deals like the Canada-EU Comprehensive Economic Trade Agreement (CETA) undermine democracy and threaten the ability of communities, civil society and governments to stop or even regulate mining projects.
Over the past 16 years residents of the town of Roşia Montană in Romania have fought against a proposed multi-billion dollar mining project, which would have destroyed their home and the surrounding environment. Joined by neighbouring villagers, environmentalists, students, priests, academics, and citizens at large, “Save Roşia Montană!” became what was then the largest people’s movement since the country’s 1989 revolution. In a remarkable show of people power, they succeeded in stopping the mine.
But the project’s majority owner, Canadian company Gabriel Resources, is now using a parallel legal system for foreign investors in order to demand Romanians pay two per cent of the entire value of their economy in compensation for lost profits. What’s more, the mining company’s legal bills are being financially backed by a Wall Street hedge fund in return for a claim of the spoils. To avoid facing these costs the Romanian Government may be forced to open the mine after all. Or Gabriel could just walk away with a vast amount of public money in compensation.
All of this is exposed in a new report from YLNM member group Mining Watch Romania, in collaboration with Alburnus Major and Corporate Europe Observatory. Read the full report here.
Some key findings of the report include:
- To operate the proposed Roşia Montană goldmine, a total of 240,000 tons of toxic cyanide would be used, which equals lethal doses for 600,000,000,000 adults.
- The mine would leave behind a waste lake of cyanide-contaminated water the size of 420 football fields – much larger than the toxic dump at Romanian Baia Mare, where a cyanide spill in 2000 caused a devastating environmental disaster.
- The mine would destroy 18th and 19th century houses and some of the world’s most valuable ancient gold mining galleries, proposed as UNESCO World Heritage.
- A total of ten permits and plans required by Gabriel Resources to develop the mine were irrevocably annulled by Romanian courts due to a lack of compliance with environmental laws or evidence of administrative abuse by different authorities.
- Mid-2015, Gabriel Resources filed an investor-state claim against Romania, arguing the country breached its bilateral investment treaties with Canada and the UK.
- The company reportedly seeks up to US$4 billion in compensation for the gold it is unable to extract in Roșia Montană – equivalent to 2% of the Romanian economy.
- Gabriel Resources’ legal costs are backed by Wall Street hedge fund Tenor in return for a claim of the spoils.
- CETA contains largely the same far-reaching investor rights used in the Gabriel Resources claim: fair and equitable treatment of investors, the protection against discrimination, and the protection against direct and indirect expropriation.
- CETA would increase the risk of challenges in the mining, oil and gas sectors, where Canadian investment is significant. Canadian mining corporations are already engaged in controversial natural resource projects across the EU and the industry is celebrating CETA as a “landmark” agreement with “major implications for miners”.
- Four out of five US-based corporations with EU operations (41,811) could use CETA to attack the EU and its member states if they structure their investment through Canadian subsidiaries.
As Roxana Pencea Brădățan from Mining Watch Romania put it:
“The battle over Roşia Montană shows how investor privileges in trade agreements can be used to subvert democracy and the rule of law. Romanians opposed the mine and our courts declared it illegal. But Gabriel’s investor-state claim could now force the government to open the mine or make Romanian taxpayers pay billions in compensation. If there ever was a wake-up call to reject the parallel legal system for corporations, which is also included in CETA, this is it.”