For two decades, community members in Roșia Montană and the surrounding villages in Romania have fought against the construction of Europe's biggest goldmine. And they have been successful. In the face of political resistance and several legal proceedings, Romania acknowledged the major risks for the environment and cultural heritage as well as property rights.
Canadian-British mining company Gabriel Resources is now suing Romania in an investor-state dispute settlement (ISDS) case for a compensation of US$3.3 billion. ECCHR is supporting the residents of Roșia Montană so that their rights are considered in the proceedings.
In November 2018, ECCHR together with its partner organizations ClientEarth and the Center for International Environmental Law (CIEL) assisted several Romanian organizations with the filing of a petition to intervene as amici curiae. The amicus curiae brief was accepted by the International Centre for Settlement of Investment Disputes (ICSID). However, the arbitration tribunal refused to hear the witness statements of affected persons and rejected the legal arguments of the brief.
The submission – on behalf of Romanian organizations Alburnus Maior, Independent Center for the Development of Environmental Resources (ICDER) and Greenpeace Romania – explains the need to consider the rights of the local residents as well as the extraordinary cultural, archaeological and regional significance of the region in and around Roșia Montană.
For 20 years, a tug-of-war battle has ensued between the Canadian-British investor Gabriel Resources and community members of Roșia Montană, Romanian civil society and the Romanian state.
Plans for the mine in Roșia Montană in Transylvania would have seen open-pit gold mining with the use of cyanide, a highly toxic substance linked with serious environmental risks. Residents of three villages would have had to be resettled while four mountains were due to be leveled. The planned mining also threatened one of Romania's most important archaeological sites. The settlement proceedings are the last step in the legal dispute over the mining project.
Q&A on the legal issues behind the case
The Canadian-British corporation Gabriel Resources is the main investor in the project, owning 81% of the Romanian Roșia Montană Gold Cooperation (RMGC) which was intended to operate the mine and received an exploration license for this purpose in 1999. The remaining 19% of RMGC is held by another Romanian corporation, Minvest Roșia Montană.
The Roșia Montană project primarily affects the residents of the three villages which would have to be relocated to allow for the construction of the mine. However, the environmental risks are much more extensive. The project foresaw the construction of a reservoir to collect 200 tons of wastewater containing cyanide. This alarmed local residents and environmentalists, particularly since in 2000, a gold mining accident in northwest Romania caused an environmental catastrophe. Cyanide leaked from the Baja Mare mine, contaminating the water relied of by 2.5 million people and killing 1,200 tons of fish.
Those opposed to the project also point to corruption, a lack of transparency and no chance to participate in important political decisions. Due to these grievances, those directly affected consider that the behavior of both Gabriel Resources and the Romanian state violates basic democratic standards. As such Romanian society as a whole is affected – and mobilized. This is demonstrated by the more than 100,000 supporters of the "Salvati Roșia Montană" (Save Roșia Montană) initiative and the tens of thousands of participants in demonstrations against the project up to 2013, making it the largest social movement in Romania since 1989.
Generally, ICSID proceedings do not consider concerns of third parties. Together with the lack of transparency, this is one of the major points of criticism of ICSID proceedings: the interests of those directly affected by the respective investment are not heard, let alone taken into consideration. For example, those affected by a construction project are not heard in the proceedings. This is also the case if it is to be expected that the state will not advocate for the interests of the affected population, for example if the government discriminates against minorities or if it does not consider the concerns of the population for other reasons.
However, according to Article 37 of the ICSID Arbitration Rules and the provisions in individual investment treaties, third parties can be admitted to the proceedings and make submissions as so-called non-disputing parties. The Canadian-Romanian Bilateral Investment Treaty (BIT) provides that the proceedings should be open to the public (Annex C Article I). Regarding third party submissions, the BIT stipulates that these shall be admitted if they are helpful for the tribunal, contain information beyond that submitted by the parties, if the submitting persons have a significant interest in the case or if there is a public interest (Annex C Article III).
The position of a non-disputing party is similar to that of an amicus curiae in other proceedings.
The arbitration tribunal decides exclusively on the basis of the law agreed on by the parties (Article 42 ICSID Convention), usually the applicable Bilateral Investment Treaty (BIT) and the ICSID procedural rules. BITs are international treaties concluded between individual states which are meant to ensure non-discrimination between investors from the state parties to the treaty and investors from third countries. In addition, they are meant to minimize political risks for investors. For this purpose they stipulate that under certain conditions, the revocation of permits or a change in the law to the disadvantage of the investor can lead to valid compensation claims.
Which BIT applies depends on the country of origin of the investor and on the country in which the investment is taking place. ICSID proceedings are only possible if there is a BIT between the home state and the host state which protects the investor. Between Gabriel Resources and Romania, applicable rules include the Canadian-Romanian BIT and the ICSID arbitration rules.
Other norms of public international law, such as UN human rights covenants or international environmental law can also be taken into consideration by arbitration tribunals. Often the BITs themselves point to general international law in addition to the treaty itself. Even if this is not the case, tribunals can, in accordance with Article 31(3)(c) of the Vienna Convention on the Law of Treaties, use additional norms of international law in interpreting the BITs. These norms can include the UN human rights covenants and international environmental law. However, so far this has been the exception in the practice of the ICSID tribunals.