Romania blocked a gold mine that would have destroyed the environment – now the company is suing

A 10 year battle between a giant new mine and local communities who were displaced shines a light on an unfair law that favours the corporation. 

In March 2024, after a legal battle that spanned almost a decade, Canadian mining company Gabriel Resources lost a compensation claim against the Romanian government. 

The mining giant had tried to seek a $4.4 billion payout before a private arbitration tribunal after its plans to build what would have been Europe’s largest gold and silver mine in the Apuseni mountain range of Western Transylvania were blocked. 

The mine was a human rights and environmental disaster waiting to happen, campaigners have said. Gabriel Resources planned to raze four mountain tops to build it, displacing hundreds of families and leaving behind a lake of toxic waste. 

But now the company is challenging the decision against its compensation claim – further highlighting the injustice of the system it used to sue the government in the first place.  

Citizens’ fight against the mine 

Residents from the local town of Rosia Montana courageously fought against the mine for 20 years, building the ‘Save Rosia Montana’ campaign into the country’s largest civil society movement.  

They petitioned domestic public institutions and took to Romanian courts to assert their rights, protect their cultural heritage, and challenge the mine’s permits – all while being under huge pressure from the Gabriel Resources as it acted in flagrant disregard of their human rights. 

Unable to approve the mine due to the opposition and court rulings, and under pressure from the company, the Romanian government proposed a special law in 2013 to allow it to claim the properties from residents refusing to leave and fast-track permitting. 

Tens of thousands of people took to the streets across Romania and around the world in months-long protests against the government’s action, eventually forcing it to withdraw the law, blocking the mine for good. Commenting on the case, Eugen David, President of Alburnus Maior, said:

We won every case to prove this mine illegal. We will prove once more the severe illegalities committed against us. We will never give up! 

So how then was Gabriel Resources able to try to get compensated for an illegal project? 

How did Gabriel Resources sue the Romanian government? 

To claim compensation for the government’s decision, Gabriel Resources used a flawed legal system called investor-state dispute settlement (ISDS), which is written into trade and investment agreements between different countries across the globe. 

The system is designed to protect corporate investments, allowing investors and companies to sue governments over public interest measures or policy decisions that impact their profits. The claims are decided outside of national courts in closed-door tribunals that are usually hidden from the public and often undermine domestic legal systems. 

In Gabriel Resources’ case, the legal action took place at the World Bank’s arbitration tribunal – bypassing not only the Romanian court’s judgment on the illegality of the mine, but also shutting out local communities. 

The arbitration procedure only allows for an ‘amicus curiae’ status, which permits third parties to a case to bring a different perspective or insight to the tribunal but does not allow people actually impacted to give evidence directly. 

What did ClientEarth do about it? 

In 2018, ClientEarth teamed up with a group of civil society lawyers to file amicus briefs on behalf of local Rosia Montana charity Alburnus Maior, the Independent Centre for the Development of Environmental Resources, and Greenpeace Romania. 

Together with the Center for International Environmental Law and the European Center for Constitutional and Human Rights, we submitted testimonies for local residents who had endured the impacts of the project, including involuntary relocation, for almost 20 years. 

And we made a strong case against Gabriel Resources. We argued the company failed to comply with international human rights law, failed to conduct due diligence on the mine’s feasibility, failed to obtain the social license necessary to operate, failed to adequately engage with stakeholders, failed to legally obtain a permit and allow public participation in the process, and failed to respect the local people’s right to adequate housing and living conditions. 

Yet, while the tribunal generally accepted the amicus briefs, it decided to exclude the testimonies of local residents and all legal arguments from the people of Rosia Montana –  and rejected their request to participate in the hearing. 

Quote> Eugen David, Alburnus Maior, said:  “In this region we are used to mining, we are open to it. I'm a mine engineer. But Gabriel Resources has behaved so badly that peoples' opposition grew. I was not born an activist, but was made one by the situation. 

What does the Romanian government’s win mean for people and planet? 

The decision of the World Bank to dismiss Gabriel Resources claim – despite refusing to hear from communities – is a major victory for the local environment and the people of the Rosia Montana. 

But the case clearly highlights the injustice of the ISDS system. It inarguably shows that in a world grappling with an environmental crisis and major corporate human rights threats, ISDS should not exist. 

We cannot keep letting corporations sue governments and be compensated with taxpayers’ money for policies that protect people and the environment, especially when they take place in secretive, closed-door procedures that ignore the people most impacted.   

Some governments, including the EU and UK, are starting to wake up to the dangers of this system by quitting the Energy Charter Treaty (ECT) – a particularly damaging agreement with ISDS that has been used by fossil fuel companies to sue over climate policies. 

But we need to end the system completely and start taking care of people and planet instead of protecting the profits of harmful and exploitative companies. 

The only solution for a fair and sustainable system is to remove ISDS from trade and investment agreements and opt for already available alternatives for investment protection.