With New Protection for Picturesque Village, Romania Gives Controversial Mining Project the Shaft

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With New Protection for Picturesque Village, Romania Gives Controversial Mining Project the Shaft

Now designated "historic site of national interest...all mining activity is prohibited"

Rosia Montana project in Romania. (Photo: Cristian Bortes/flickr/cc)

A Romanian village on Thursday scored a win for its environment and cultural heritage as its new designation as a "historic site of national interest" blocks a long-contested gold mine.

Agence France-Presse describes the development as "a new blow for Canada's Gabriel Resources which has been trying for 15 years to get an environment ministry permit to extract 300 tonnes of gold from the picturesque village" of Rosia Montana.

As Common Dreams previously reported, since the project's proposal in the late 1990s, it has faced fierce resistance from residents and activists who say the mine would have destroyed mountains, nearby villages, and ancient Roman ruins, as well as displaced residents. A main concern was also the planned use of cyanide for the extraction.

The new status means that "all mining activity is prohibited," said Adrian Balteanu, the ministry's adviser on cultural heritage.

Yet the win may still prove costly for Romanians because of the risks that come with corporate-friendly trade deals.

That's because, as Brent Patterson, political director of the Council of Canadians, writes Friday morning, Gabriel Resources already has a challenge underway with the World Bank's International Center for Settlement of Investment Disputes (an ISDS challenge)—meaning it's trying to seek compensation for damages from Romania for not being able to make profits from the project.

It's allowed to do that, as journalist Claudia Ciobanu previously reported, "because of bilateral trade treaties Romania signed with Canada (where the company is listed on the stock exchange) and the UK (it is not yet clear whether the company is able to use the treaty with the UK because it has a subsidiary in infamous tax haven Jersey or for another reason)."

Patterson offers this background:

In Sept. 2013, the company threatened it could seek up to $4 billion "for multiple breaches of investment treaties" if the mine were blocked. At that point it had reportedly spent "more than $500 million" on the mine. In May 2014, after a Dec. 2013 Romanian parliament vote effectively rejected the mine, the company said it was preparing an international arbitration case against the Romanian government. In a Jan. 2015 media statement, the company said, "Gabriel has issued the Notice as it asserts that it has not been afforded the treatment by the Romanian Authorities that is stipulated by investment protection treaties signed by Romania."

Early last year the company also stated, "The Gabriel Group is prepared to present its claims to international arbitration in order to compensate fully for its rights to develop the Project that have been denied by Romania's treaty violations." And by Aug. 2015, the Ecologist reported that Gabriel Resources had "filed a $2.56 billion claim in a World Bank trade court against Romania after its rejection of a huge gold mine at Rosia Montana. ...Although Gabriel Resources is Canadian, it is taking the action under a bilateral trade agreement between Romania and the UK, which includes 'investor-state dispute settlement' (ISDS) clauses..."

Ciobanu wrote, "With the vast expansion of the use of investor-state dispute settlement brought about by the TTIP (the Transatlantic Trade and Investment Partnership), Romanians and other Europeans can only expect more of such cases."

The Rosia Montana case, she added, "serves as an omen of what Europe's future may look like if citizen power is not restored."

In October 2015, after viewing a leaked of draft of negotiating text from the TTIP, environmental groups in the U.S. and Europe wrote:

If the EU and U.S. negotiators want to ensure that environmental protection is not undermined by TTIP, they need to start by amending the agreement’s polluter-friendly terms. They should, for example, remove foreign investor rights (including ISDS or the Investment Court System) that threaten environmental policies, eliminate rules designed to facilitate increased trade in fossil fuels, and delete procurement terms that restrict green job creation. To guarantee environmental protection, they also should carve out environmental policies from all of TTIP’s rules. Barring such changes, TTIP would remain a toxic trade deal.

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