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CETA could mean Galicia pays for unwanted open-pit gold mine

A map of the proposed Corcoesto open-pit gold mine in Galicia.

A map of the proposed Corcoesto open-pit gold mine in Galicia.

Vancouver-based Edgewater Exploration wants to establish its Corcoesto open-pit gold mine in Galicia, an autonomous community in northwest Spain. In October 2013, the regional government there temporarily halted the development of the mine due to concerns about water contamination and other environmental and community concerns. While there are reports that the mine has been cancelled, the company was still claiming in December 2014 that it was “currently developing” the mine.

Lidia Senra Rodríguez, a Galician Member of the European Parliament (MEP), says, “In Galicia, Edgewater, a Canadian company, is seeking authorisation from the Galician Government for a gold mining exploration project that would damage farmland and woodlands. The Edgewater project would involve the use of cyanide and consequently endanger human health, aquatic fauna, and water quality.” She adds, “The Galician Government announced several months ago that the gold project had been cancelled. However, according to recent press reports, Edgewater is planning to sue the Government for damages unless the cancelled project is reinstated or the company receives financial compensation.”

In October, the MEP asked the European Commission, “Can it really be the case that, because of the [Canada-European Union] CETA, the Galician people will be obliged to pay compensation to Edgewater in order to protect the soil, the environment, and their health?”

Last month, European trade commissioner Cecilia Malmström replied, “No Canadian company is at the moment able to rely on the Comprehensive Economic and Trade Agreement (CETA) with Canada to challenge any decision concerning its investment, including bringing claims for compensation, as this agreement is not in force. CETA will only enter into force once the respective approval procedures are completed by Canada and by the EU.” That’s obvious enough (if not disingenuous of Malmström] in that the agreement hasn’t been ratified yet.

But then Malmström adds, “CETA makes clear that the EU and Canada preserve their right to regulate and to achieve legitimate policy objectives, such as public health, safety, environment, public morals and the promotion and protection of cultural diversity. This means that an investor cannot be given compensation just because he has lost profits or suffered economic loss or costs.”

That appears to be contrary to a key finding in the recent Trading Away Democracy: How CETA’s Investor Protection Rules Threaten the Public Good in Canada and the EU report that highlights, “CETA would increase the risk to the EU and its member states of challenges by Canadian investors in the mining and oil and gas extraction sectors.”

That report states, “Canadian mining companies are already engaged in a number of controversial natural resource projects across the EU. In one case, Canadian mining company Gabriel Resources threatened to sue the Romanian government on the basis of an existing bilateral investment treaty between Canada and Romania (one of eight existing treaties between Canada and Eastern European EU member states) because in response to strong community resistance the government rejected a proposed gold and silver mine in Rosia Montana. If CETA’s investment chapter goes into effect, Canadian mining companies will be able to threaten and file similar lawsuits against the EU and all of its 28 member states. No wonder mining specialists are celebrating CETA as a ‘landmark’ agreement, which could have ‘major implications for miners’.”

Our German ally Campact has also highlighted, “Gabriel Resources has announced in the Canadian press that it may sue the Romanian state for $4 billion in damages – almost 2% of Romania’s gross domestic product. This is made ​​possible by the bilateral investment protection agreements that Romania in the 1990s with many Western countries.” And significantly the Campact article warns that, “With CETA and TTIP the Rosia Montana example could become commonplace.”

The European Commissioner for Trade should be called on to clarify her response.

It’s perhaps also worth asking Canadian finance minister Joe Oliver about his definition of the word “fair”. In November 2013, when he was still the natural resources minister, he told the Board of the Prospectors & Developers Association of Canada that with CETA, “There will be a sense that [investors] will be treated fairly.” When he made that comment he added CETA establishes “a predictable, rules-based investment climate and provide[s] a high standard of protection for investors.”

Further reading
Canadian and Romanian groups denounce Rosia Montana mine (December 2013 blog)
Barlow denounces CETA for promoting mining injustice (December 2014 blog)
CETA would mean more uranium mining in Canada (November 2013 blog)