WASHINGTON, March 11, 2024 — In a historic decision by the International Centre for Settlement of Investment Disputes (ICSID), Canadian mining company Gabriel Resources lost its damage claim against the government of Romania. The company was ordered to reimburse Romania for the cost of arbitration, as well as a portion of the government’s legal costs. The decision comes more than eight years after the case began over Europe’s largest open-pit gold and silver mine. Gabriel Resources’ planned mine threatened the historic Roșia Montană Mining Landscape, which was named a UNESCO World Heritage site and a Heritage in Danger site in 2021.
In 2015, when construction of the mine stalled due to the suspension of environmental permits and years of community opposition related to environmental, health, and cultural risks, Gabriel Resources filed a claim against the Romanian government, seeking $4.4 billion in damages. The case was brought to the World Bank’s ICSID, the main tribunal for investor-State disputes. The final decision was made public on Friday, with ICSID ruling in favor of the Government of Romania.
Carla García Zendejas, Director of the People, Land & Resources Program at the Center for International Environmental Law (CIEL) released the following statement:
“CIEL joins the people of Roșia Montană in celebrating this historic moment. Twenty-five years of protecting their homeland has taken a toll on the community, but this final decision marks a welcome end to the struggle. Still, this case is another example of the flaws of the investor-State dispute settlement (ISDS) system, which would have punished the Romanian government for seeking to comply with its legal obligations. From Mexico to Romania and beyond, ISDS stands as a potential threat to necessary action by States to protect the environment and communities from the impacts of development projects and the climate crisis. For decades, mining companies have used ISDS arbitration to their advantage, based on provisions in trade and investment agreements. And fossil fuel companies are following suit. While this particular case proved unsuccessful for Gabriel Resources, companies around the world continue to pursue ISDS as a means to profit from a system that can ultimately threaten communities, the environment, and the climate.
“Since this mining project was announced, the social fabric of the Roșia Montană community has frayed, and many have fled the area in anticipation of forced relocation. CIEL expresses our solidarity with the local advocates, who successfully defended their cultural heritage and landscape for over two decades — but at a steep cost. We will continue to work to identify legal strategies for States to reduce their exposure to investment arbitration claims and help equip them to do so. Government decisions to ensure a healthy environment for future generations should not be jeopardized by the threat of billion-dollar arbitration claims.”
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