http://www.yestolifenotomining.org/usa_canadian_mining_companies_to_sue_colombia_for_16-5billion/
US and Canadian Mining Companies Seek to Sue Colombia for $16.5billion
Originally posted by IAReporter. March 9th 2016
Following a request to the Republic of Colombia for disclosure of any
disputes notified under the United States-Colombia Free Trade Agreement
(FTA), Colombia’s Ministry of Trade has released a recently-filed notice
of arbitration under that agreement (click to download).
The notice dated February 19, 2016 was lodged by three parties – Cosigo
Resources (Canada), Cosigo Resources Sucursal Colombia (Colombia) and
Tobie Mining and Energy Inc. (U.S.A.) – all professing to have interests
in a gold mining concession.
We discuss the notice of arbitration – which Colombia has released – in
greater detail further below.
Also as this article was going to press, a Canadian mining company, Eco
Oro Minerals Corp, announced that it had lodged a Notice of Intent to
arbitrate under the Canada- Colombia free trade agreement (FTA). We
discuss that dispute, where the notice of intent is not public, directly
below.
Eco Oro says notice given, but neither side releases it – and
Canada-Colombia FTA seems to leave scope for non-publication
In an announcement on March 7, 2016, the Canadian junior mining company
Eco Oro says that it has been hampered in exploring and exploiting a
wholly-owned gold mining venture, the Angostura Project, due to the
government’s “unreasonable delay in clarifying the limits of” a national
park, the Santurbán Páramo, and whether that park overlaps with the
Angostura Project. The company also complains of the government’s
“persistent failure to provide clarity as to Eco Oro’s right to continue
developing its mining project in light of further undefined requirements
and later as a consequence of the Constitutional Court’s decision of
February 8, 2016, which has broadened the prohibition of mining
activities in páramo areas.”
Colombia’s Ministry of Commerce has told IAReporter that they are not
releasing, for the moment, the Notice of Intent in deference to the
investor’s professed desire to seek amicable resolution of the dispute.
Although the Canada-Colombia FTA brings some transparency to
arbitrations under that agreement, the wording of the provision arguably
leaves some scope for governments to decline to release preliminary
filings, such as Notice of Intent. Article 830 of the treaty provides
for publication of all arbitral awards, but does not directly address
Notice of Intent or Notices of Arbitration. Instead, Article 830
provides that “All other documents submitted to, or issued by, the
Tribunal shall be publicly available, unless the disputing parties
otherwise agree, subject to the deletion of confidential information.”
(It’s not clear whether a Notice of Intent is a document submitted to,
or issued by, a tribunal; even if it were, investors and governments
appear to each enjoy a veto right over publication of such documents.)
Unrelated mining arbitration now pending under U.S. Colombia treaty
Apart from the Eco Oro dispute, Colombia also faces an active
arbitration under the U.S.-Colombia FTA, after a trio of claimants filed
a request for arbitration on February 19, 2016. That request follows an
earlier filing of a Notice of Intent under the FTA.
Notably, the U.S.-Colombia FTA provides for broader transparency than
the Canada-Colombia FTA, with certain categories of materials –
including Notices of Intent and Notices of Arbitration – included within
the scope of Article 10.21. That treaty articles obliges the
respondent-state to “promptly transmit (such documents) to the
non-disputing Parties and make them available to the public”
Colombia has accordingly released the Notices filed by the three
claimants – Cosigo Resources (Canada), Cosigo Resources Sucursal
Colombia (Colombia) and Tobie Mining and Energy Inc. (U.S.A.) – and we
discuss the dispute below.
Claimants cite harm to gold mining investment
The three claimants all profess to have interests in a gold mining
concession in the Taraira region near Colombia’s border with Brazil. The
investors claim that Tobie, the US investor, “staked out” those
interests in 2007, subsequently transferred a majority interest to the
Canadian claimant Cosigo, only to take back most of that shareholding in
2015 from its Canadian co-claimant.
The claimants note that the prospect of extractive activity in the area
sparked conflict among local indigenous groups, with long-standing
associations coming out against mining. However, one group, the
Association of Indigenous Communities of Tairara and Vaupés (ACITAVA)
was more favourably disposed toward the project, and the notice suggest
that they were granted a 20% ownership share of the concession. (An
earlier Notice of Intent (click to download) lodged in relation to this
investment had included that Colombian NGO as a prospective claimant,
however ACITAVA is no longer cited as a claimant in the Notice of
Arbitration).
Resolution creates national park encompassing claimant’s mining concession
The claimants say that the Colombian co-claimant initiated technical
approval of their venture, and this was granted in December of 2008. The
claimants say that final legal approval of the project was granted by
the National Mining Agency in April of 2009. However, the claimants
allege that an unexplained five month delay ensured that they were
unable sign the mining concession until October 29 2009. In their Notice
the claimants contend that, on the same day, a resolution was published
which created the Yaigoji Apaporis national park, encompassing the area
of the mining concession.
The claimants allege that the unexplained delay was thus a deliberate
attempt on the part of Colombian authorities to slow down the approvals
process until the park could be established, thus casting a shadow over
the legality of the now-signed mining concession. The notice further
claims that the consultation process for the approval of the park was
conducted fraudulently by authorities who, for example, falsified the
appearance of majority consent for the park, despite not carrying out
the required consultations with all affected communities.
Claimants or their allies domestic legal challenges to the national
park; constitutional court has ordered all mining activity to cease in park
ACITAVA filed a number of legal challenges to the park, including a
nullification suit against the Network of National Natural Parks, and an
accion de tutela (a legal mechanism for challenging alleged violations
of constitutional rights) alleging that authorities had improperly
conducted the consultation for the national park. For its part, the
National Mining Agency filed a suit seeking to nullify the mining
concession, despite, the claimants contend, having issued the approval
of the licence before the park was created. While none of these domestic
cases had been resolved at the time of filing, the Constitutional Court
has subsequently ruled to suspend all mining activity in the park.
In their FTA claim, the claimants portray themselves as victims of a
fraud, and note that they have received no compensation for the loss of
their concession, as allegedly required under both domestic law and
Article 10.7 of the US-Colombia Trade Promotion Agreement. Therefore,
the claimants seek either the return of the concession or the fair
market value of the project, which the claimants place at $16.5 billion.
(They do not clarify how they have reached this sum.)
Notice is anomalous in some respects
The notice does not explain how Cosigo, a Canadian company, might claim
under the U.S.-Colombia FTA. However, the notice does allude to a
possible coming claim against Colombia under the Canada-Colombia FTA.
Indeed, the ownership interests of the U.S. and Canadian claimants is
left vague in the Notice of Arbitration. Whereas the earlier Notice of
Intent had given some description of the relative shareholdings of each
claimant over time, the Notice of Arbitration omits such detail.
Further, while the Notice is couched as a request under the UNCITRAL
rules, the claimants also express a desire that the American Arbitration
Association serve as the “arbitrating authority”. The notice does not
clarify whether this is a reference to a mere administrative role, or a
proposal that the AAA rules be used for the case. (The U.S.-Colombia FTA
doesallow parties to agree to use rules other than those of ICSID or
UNCITRAL.)
The claimants have nominated a Texas-based attorney, Brian Coleman, as
arbitrator. Mr. Coleman does not appear to have served as investment
treaty arbitrator previously. His website indicates that he has worked
as a trial attorney, and domestic arbitrator and mediator. The claimants
are represented by the Law Office of Kevin W. Boyd. This is their first
known appearance in an investment treaty arbitration.
Colombia has not yet announced who it will hire as legal counsel.
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