Fate of Rosia Montana valley in Romania uncertain as UNESCO and ICSID hearings appear to be on hold

This massive march against the Rosia Montana mine took place in Bucharest, Romania in September 2013. Photo by Romania Insider.

The Council of Canadians has opposed the construction of the controversial Rosia Montana mine in Romania since December 2013.

Whitehorse-based Gabriel Resources wants to construct a massive open-pit mine in the Carpathian mountains that would use cyanide to mine about 314 tons of ton of gold and 1,500 tons of silver. It would destroy mountainsides, displace about 2,000 villagers and create a 300-hectare toxic tailings pond.

As public opposition to the mine grew, the Romanian government of the day eventually rejected the project in 2014.

By August 2015, Gabriel Resources filed a $4.4 billion claim against Romania through the World Bank International Centre for Settlement of Investment Disputes (ICSID) using the investor-state dispute settlement provision in the Romania-United Kingdom bilateral investment treaty. The company filed the challenge through its Jersey-based 'subsidiary' that opponents believe is a shell company. Jersey is a 'British Crown Dependency' located near the coast of Normandy, France that, for historical reasons, has a jurisdictional relationship with the United Kingdom.

In one effort to protect the valley from the mine, an application was made in early 2017 by the Romanian ministry of culture to UNESCO to have Rosia Montana recognized as a world heritage site.

The application was to be heard at a meeting of the UNESCO World Heritage Committee meeting taking place between June 24-July 4 of this year.

But on June 7, Euractiv reported, "The Social Democratic (PSD) government sent [an] official withdrawal notice shortly after the International Council on Monuments and Sites (ICOMOS) recommended the inclusion of Rosia Montana on the UNESCO list of protected sites. A decision on the file - likely positive - was imminent."

The current Romanian minister of culture George Ivascu said a delay was necessary until there is a ruling by the International Centre for Settlement of Investment Disputes.

That move was denounced by former former culture minister Vlad Alexandrescu. Business Review quotes Alexandrescu commenting, "It is Romania’s most shameful moment since it entered UNESCO. All countries were going to vote for inclusion, nobody would have had any objection. Nobody, besides Romania. The interests of a corporation and a political class that sold out 20 years ago were more important than the national interest."

Furthermore, the ICSID hearing was expected to be in December 2019, but a recent Court of Justice of the European ruling seems to have thrown that into doubt.

On June 14, Mining.com reported, "Gabriel Resources lawsuit against Romania suffered a setback as the country told international arbitrators they can't hear the Canadian miner’s claim. Romania’s government said a recent, ground-breaking court decision had slammed the door on certain investment arbitration cases involving European Union members, so Gabriel’s case can’t be solved that way any longer..."

Financier Worldwide explains, "This spring, the CJEU [Court of Justice of the European Union] rendered a landmark decision deeming investor-state arbitration on an intra-European level incompatible with European law. The court ruled that investor-state arbitration within the EU violates the principle of sincere cooperation of Article 344 of the TFEU [Treaty on the Functioning of the European Union]. The ruling [is not limited to the specific case heard under the Netherlands-Slovakia Bilateral Investment Treaty and] may therefore raise questions regarding the validity of the dispute settlement provisions in all of the 196 intra-EU BITs currently in force."

The fate of the valley and the investor-state challenge are unknown, but Romanian freelance reporter Claudia Ciobanu has commented, "Withdrawing the UNESCO application would certainly signal to Gabriel the Romanian government’s ‘good will’ towards brokering a settlement."