August 31, 2017
Guest blog post by Claudia Ciobanu, a Warsaw-based freelance reporter covering Central and Eastern Europe.
Romania’s Prime Minister Mihai Tudose announced in a TV interview last night that he plans to withdraw Romania’s application to make Rosia Montana a UNESCO world heritage site.
This may look like a technical detail in a nature protection case. In reality, it’s the latest important instalment in what could be called a political thriller that has gripped Romanians for years and, in the process, dramatically changed Romanian society.
In 2015, Canadian-listed company Gabriel Resources sued Romania in front of the World Bank International Center for Settlement of Investment Disputes (ICSID), a commercial arbitration court, for not being allowed to go ahead with its plans to build Europe’s largest gold mine in the Transylvanian village of Rosia Montana. This summer, Gabriel confirmed it was asking for $ 4.4 billion in damages, a crushing sum for Romania, one of the poorer members of the EU.
The company (and its various predecessors) had tried for over a decade to start mining in Rosia Montana, but its various permits were repeatedly struck down by Romanian courts. In 2013, the Social-Democratic government (Tudose’s party) tried to pass a law that would have allowed the company to go ahead with mining regardless of the court decisions. Massive protests ensued in Bucharest and many other Romanian cities and villages, causing the government to drop the draft law and, consequently, cancel the project. Gabriel Resources then sued in front of the arbitration court.
The case is watched with interest beyond Romania as such arbitration cases are expected to multiply exponentially if planned trade deals between the EU and the US and Canada (TTIP and CETA) are going head.
Last year, a Romanian technocratic government led by former EU Commissioner Dacian Ciolos prepared an application to put Rosia Montana on the UNESCO world heritage site, which would ensure its permanent protection. This was a move that had been discussed for years in Romania, but Ciolos’ culture minister Corina Suteu was the first politician to have enough will to push through with the idea.
Christmas 2016 was nerve wrecking for those following the case in Romania. The Ciolos government was ending its mandate after the Social-Democrats had won general elections. The UNESCO application was ready to be sent, but Ciolos appeared to get cold feet: in his government’s last press conference, Ciolos’ spokesperson announced the government would not take responsibility for sending the application to UNESCO.
Information leaked at the time suggested Romania’s lawyers at the World Bank court were worried that including Rosia Montana on the UNESCO list might damage Romania’s odds (controversially, within the logic of these investment dispute settlements, once the company sued, Gabriel could then try to use any further sovereign action by Romania to protect the village as evidence against Romania in the case).
The first days of 2017 brought another about-face: with the new government slow to form, Ciolos stayed on as a prime minister for a few extra days, constantly under pressure from street actions and lobbying by civil society to send the file to UNESCO. He eventually allowed Suteu to apply right before leaving office.
The dossier is thought to be solid and the application likely to go through (a decision by UNESCO is expected towards the end of 2017). Rosia Montana seemed saved.
But defenders of Rosia Montana always feared that a PSD government might be open to cutting a deal with Gabriel Resources. In 2013, the same party was ready to pass a law that would have put the interests of the company above Romanian courts. Notorious members of PSD are thought to be close to the company: the current Bucharest mayor Gabriela Firea was once posing in clothes with the mining company logo, while the firm of former minister Vasile Dancu authored opinion polls which benefited the company but were later proven to be faulty.
There has never been an official investigation into the Rosia Montana affair in Romania, but most people in Romania are convinced corruption among the political class and media is the reason the mine project was never challenged by anyone in power before 2013.
The timing of Tudose’s announcement last night is no accident.
The World Bank Tribunal case, which can last as much as 6-7 years, was always going to be a source of information about potential backroom dealing. Right now, the Romanian government and the company are engaged in a bitter procedural dispute about disclosure of documents.
On June 30, Gabriel Resources had submitted to the Tribunal a so-called ‘Memorial’, a document in which it outlines in detail the arguments for the claim that the company’s investments in Romania ‘had been expropriated without compensation’, the basis of the arbitrage. The document should show how Gabriel spent money in Romania and could be a treasure trove for those investigating the case.
The World Bank Tribunal tend to publish documents of the case within 2 months of submission, meaning that this document is expected to appear on their website by tomorrow (it hasn’t yet).
In August, Mihai Gotiu, currently the vice-president of the Romanian Senate, and a former journalist and Rosia Montana activist, announced publicly that sources in the government had told him the Prime Minister had been advised by Romania’s lawyers in the World Bank case that it should end the case now (the lawyers refused to confirm this information invoking confidentiality).
Gotiu claimed that the information contained in the ‘Memorial’ could be compromising for some high-ranking Romanian politicians, including from PSD, that could have in the past had links to Gabriel Resources. The only way to prevent the ‘Memorial’ from being published would be to signal to Gabriel that a settlement is possible, Gotiu claimed.
Up until last night, all of this was mere speculation. But Tudose’s sudden announcement that he would withdraw Romania’s application to make Rosia Montana a UNESCO site seems to confirm Gotiu’s claims. Tudose gave no reasons during the interview last night why the application would suddenly be without merit, but spoke instead about the high value of the gold resources at Rosia Montana.
Withdrawing the UNESCO application would certainly signal to Gabriel the ‘good will’ of the Romanian government in view of a possible settlement. With a decision by UNESCO expected this year, the executive has little time for manoeuvre.
Source featured image: rosiamontana.org.