ICSID: "The Romanian state did not abuse its power in the Roşia Montană case"

George Marinescu
English Section / 10 mai

Photo source: www.gabriel resources.com

Photo source: www.gabriel resources.com

Versiunea în limba română

The Romanian state did not abuse its powers and the Parliament's rejection of a draft law on the mining of gold from Roşia Montana was not politically influenced, states in the reasoning of the decision of the judges of the international arbitration tribunal (ICSID), which operates in Washington ca. one of the institutions of the World Bank. The magistrates also note that the inclusion of the Roşia Montană area in the UNESCO heritage was not unreasonable.

The reasoning of the decision, which spans 413 pages, was published, after certain passages were previously hidden according to the requests of the parties in litigation - the Romanian Statute on the one hand and the Gabriel Resources company, on the other, the two months from the public area on March 8 2024 of the ICSID decision by which the claims of the Canadian companies were rejected, which was obliged to pay the Romanian Government the incurred court costs.

Regarding the Parliament's compliance with the draft law on the mining of gold in Roşia Montană, this took place after in 2013, tens of thousands of Romanians took to the streets and demanded the rejection of the normative act of initiation of the Ponta government . in favor of Roşia Montană Gold Corporation.

In the action opened by Gabriel Resources, the company claimed that the statements prior to the vote in Parliament made by the leaders of the governing coalition at the time - Prime Minister Victor Ponta and Crin Antonescu, co-presidents of the Social-Liberal Union (USL) - decisively influenced . project lock.

In their reasoning, the members of the international arbitration tribunal state: "The bill, whether successful or not, was intended to allow the project to move forward. The legal system as it was was known by the applicants when they decided to invest in Romania. In light of the above, the Tribunal finds no evidence of an abuse of power in the way the Respondent managed the conduct of the authorization process and the project, particularly when the Government submitted the draft law to Parliament and when Parliament rejected that draft law".

Moreover, the magistrates state: "This is not a case where the state abused its sovereign powers to profit from the efforts and capital of private investors to their detriment, nor did it intervene to transfer a profitable project of one private investor to another." ".

Consequently, the international arbitration tribunal also rejected the claimants' argument that the Government should decide which lead to the UNESCO registration were the result of the decision of 9 September 2013 not to proceed with the project.

ICSID magistrates: "The inscription of Roşia Montană on the UNESCO World Heritage List is not a politically motivated act to prevent the implementation of the Gabriel Resources project"

Regarding the registration of Roşia Montană in the UNESCO heritage, the magistrates found nothing illegal. Romania's nomination for Roşia Montană for consideration on the UNESCO World Heritage List was made in 2016, followed by the submission of the nomination file to UNESCO in January 2017. The candidature was then withdrawn in June 2018 and submitted again in January 2020. According to ICSID, the inclusion of Roşia Montană in the UNESCO Heritage was not unreasonable, as long as Romania's actions in this regard took place approximately three to seven years after the rejection of the draft law by the Parliament. Moreover, at that time, the UNESCO Commission itself proposed the organization of public consultations on the possibility of classifying Roşia Montană. This has also been reported by experts.

The reasons for the ICSID decision state: "It is clear from the documents that the reason for this was the idea that the claimants (Gabriel Resources) might not proceed with the project or implement the project might not proceed. The idea was to somehow ensure the financing and development of the area in such a scenario. Indeed, inclusion on the World Heritage List gives states access to international assistance, including financial assistance. Therefore, the proposal itself was not unreasonable."

The cited document states that Gabriel Resources has not provided any legal analysis to justify how an "additional layer of protection" is "fundamentally incompatible with RMGC's mining license," noting that the state enjoys wide discretion in adopting . protection and conservation measures of cultural heritage.

Furthermore, the ICSID magistrates show that when Romania reactivated UNESCO's request, it stated that "RMGC has not yet met, but can still meet, the requirements of Romanian law to obtain the environmental and other authorizations necessary to mine from Roşia Montană".

According to the court decision is clear, and the plaintiffs do not argue otherwise, that the UNESCO Convention itself does not create an obstacle to the Project or that the UNESCO list is not incompatible with the Roşia Montană Licence.

"In fact, as the Defendant (Romania) explained to UNESCO, the Roşia Montană license was extended in 2019 for five years", the motivation states.

As such, according to the quoted document, "The Tribunal cannot indicate anything that supports the claim that the plaintiffs could not obtain the declassification of the Roşia Montană area from the List of Historical Monuments".

The magistrates also state: "There is no evidence to support the plaintiffs' claim that the UNESCO list created impediments that were fatal to the continuation of the Project. Therefore, the Tribunal cannot infer from Romania's request to include Roşia Montană on the UNESCO World Heritage List a politically motivated act to prevent the implementation of the Project".

Against all this, the ICSID magistrates concluded that there was no violation of commercial treaties and consequently determined by a majority of 2 to 1 that the Romanian authorities did not act in an arbitrary, discriminatory or inconsistent manner, did not deny the claimants a fair trial, did not contradicted the specific statements made to the claimants or the claimants' reasonable expectations, did not abuse the powers conferred by applicable law, did not treat the claimants and/or the claimants' investments differently from other investors in similar circumstances and did not deprive them those of Gabriel Resources from the reasonable use of the plaintiffs' investments and the resulting benefits.

Horacio Grigera Naon: "The actions of the Romanian state, politically motivated in the period 2011-2015"

The Court of International Commercial Arbitration in Washington (ICSID) established, on March 8, 2024, that Romania does not have to pay any compensation for canceling the mining operation in Roşia Montană and requesting the inclusion of the area in the UNESCO heritage. In July 2015, Gabriel Resources submitted to ICSID the arbitration request against the Romanian state, claiming that its investment was expropriated through several acts of the Romanian authorities, including through the politicization of the Roşia Montană mining project authorization procedure. The total discounted value of the damages sought was approximately $6.7 billion. Gabriel Resources expected to receive at least $2 billion. The case was arbitrated by three specialists: Pierre Tercier, the president of the Tribunal, Zachary Douglas KC, nominated by Romania, and Horacio A. Grigera Naon, proposed by Gabriel Resources.

In fact, the company-nominated arbitrator also wanted to submit a separate position, disagreeing with the final decision of the Tribunal. In the separate opinion that spans 37 of the 413 pages of the reasoning of the ICSID decision, Horacio A. Grigera Naon claims that starting from mid-2011 until 2015, the Romanian state's actions regarding Gabriel Resources were predominantly politically motivated.

In his separate opinion, Horacio Grigera Naon states: "The pursuit of political objectives, often inextricably combined with economic ones, and the renegotiation of the conditions under which Gabriel Reosurces undertook to carry out and complete the Roşiia Montană project were the cause of the Project's demise, and not environmental issues. Political or economic reasons or objectives cannot be an excuse for non-compliance

bilateral investment protection treaties (BITs) or for the denial of rights arising from such provisions. The behavior of the state (...) must be evaluated holistically to determine whether it is a custom to privilege political or economic objectives to the detriment of respecting the rights of investors and the concurrent obligations of the state according to international law. A proper analysis of this

the situation from the perspective of BIT investments and investor guarantees and

international law requires a dot-connecting exercise to evaluate the entire conduct of the Romanian state in this case. Without the environmental permit, the Project was not possible, nor feasible. As various government dignitaries, including State Secretary Năstase and Prime Minister Ponta, have pointed out, above all other

conditions, the approval of the environmental authorization was decisive in making the decision regarding the realization of the project. In other words, environmental issues were important factors that conditioned government conduct and public opinion that opposed the Project. The facts and conduct relating to the granting or non-granting of the environmental authorization may give rise, in isolation or in tandem, to breaches of the Treaty. They are an integral part of the existing record and constitute a substantial basis of the plaintiffs' case. Failure to consider them would constitute a violation of due process. Negative state behavior affecting rollout or the completion of the process leading to the granting of the environmental permit, including the expected end result of the process (ie, the granting of the permit) may constitute a treaty violation of the standard of fair and equitable investor protection'.

In light of the above, the third magistrate decided in favor of Gabriel Resources, but the Romanian state won the case with a majority of 2 to 1.

ICSID secreted hundreds of paragraphs of reasons

Hundreds of paragraphs from the reasoning of the World Bank Tribunal, from Washington (ICSID), regarding the litigation in which the company Gabriel Resources requested billions of dollars in damages in the case of Roşia Montană, were classified, through blurring. This was the reason why the publication of the decision was postponed by 60 days: the possibility that the Government of Romania, respectively Gabriel Resources, decide which parts of the reasoning will not be published.

According to an analysis carried out by the Romania Curată website regarding the hundreds of blurred (classified) paragraphs from the reasoning of the ICSID decision, the respective texts would look at the following aspects:

- The Ponta Government's secret negotiations with Gabriel Resources, especially through the Minister of Large Projects, Dan Şova, from the spring to the fall of 2013 (the most consistent part)

- The negotiations of the Boc Government (especially the involvement of the Minister of the Environment, Laszlo Borbely, but also of other ministers) with the company, between September 13, 2011 and January 26, 2012

- The mode of transfer of the exploitation license for Roşia Montană from Minvest Deva to RMGC, respectively of the exploration licenses for Bucium

- The three-year extension of the exploration licenses for Bucium and, then, the requests to obtain the exploitation license for the same perimeters

- The discussions for the declaration of the Roşia Montană project as being of local interest, respectively of national interest, from July 2011

- The recapitalization of RMGC, from 2013, with the possible drastic reduction of the participation of the Romanian state

- ANAF investigations from November 2013 and May 2014

- Information related to feasibility studies

- Information about the court action of RMGC against the National Heritage Institute and the Ministry of Culture, for the inclusion of Roşia Montane on the List of Historical Monuments in Romania.

- Cancellation, in court, following the actions of civic lawyers, of the environmental approval for a General Urbanistic Plan favorable to the company (in 2016).

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