EcoLur
On 31 August the Teghout Protection Group held a protest demonstration in front of the Yerevan office of the European Bank for Reconstruction and Development. Teghout Protection Group members gave a letter to Valeri Razlog, Head of Yerevan Office of the European Bank for Reconstruction and Development.
This letter particularly says:
“Dear Mr. Razlog,
We are writing on behalf of the environmental movement embracing thousands of individuals and dozens of non-governmental organizations to express our concern related to the possible funding of the controversial mining project in the Teghut forest in Armenia by VTB bank - the loan beneficiary of the European Bank for Reconstruction and Development.
The EBRD has been the first multilateral development bank with an explicit environmental mandate to promote environmentally sound and sustainable development in the full range of its activities. We appreciate the course and activities of the EBRD in this respect and assume that in its turn it shall demand high standards from its partners and beneficiaries. Unfortunately, such standards are not always strictly required by the lender and/or met adequately by respective partners and, hence, the EBRD appears in a position to indirectly finance environmentally unsound and risky projects and endanger its reputation.
One of the partners of the EBRD is the VTB Bank Armenia, which, in accordance with the agreement signed in January 2009, will receive 10 million USD credit from the EBRD for the funding of small and medium-sized enterprises in Armenia. We would like to draw your attention to the fact that the same bank, VTB Bank of Armenia, intends to give a loan of almost 250 million USD to the Armenian Copper Program (ACP) for a 12-year development of the Teghut copper-molybdenum mine in the northeastern region in Armenia. The loan agreement between VTB and ACP was signed in May 2008, but only limited amount has been transferred to ACP due to the global financial crisis. According to recent statements by ACP and the VTB leadership, VTB will be ready to continue to disburse its loan to ACP in September 2010.
By way of background, in 2001 the Government of Armenia issued a license to ACP for exploitation of the Teghut copper-molybdenum mine. Eighty-one percent of the shares of ACP belong to the so-called Vallex F.M., a company registered in Liechtenstein and having no other publicly available information. It is difficult to ascertain the legitimacy of Vallex, its ownership, and legal and accounting propriety of its operation. Since 1997, ACP has operated the copper smelter in Alaverdi, a city 18 km to the north-east of the Teghut forest. As a result of this activity, ACP has gained a reputation as being notoriously careless about the environment and human health.
The Teghut copper-molybdenum deposit is located in a picturesque and complex landscape covered with forests and engraved by gorges of the Shnogh River and its tributaries, which are the main water sources for the Shnogh and Teghut villages. Teghut forest is one of the best-preserved forest areas in the country with rich biodiversity, including about 200 species of plants, 55 species of mammals, 86 species of birds, 10 species of vermigrades and 4 species of amphibians. Many of these species are rare and endangered, 6 plants and 29 animals are included in the Red Book of Armenia. There are about 20 historical and cultural sites from antiquity and the middle ages.
The land allocated for exploitation of the mine is 1,491 hectares (ha), 82% (or 1,232 ha) of which is covered with forests. The project plans clear-cutting 357 ha of the forest. As a result of resource extraction, one of the forested mountains will be replaced by a 600 meter deep pit. Dumping tails will be disposed in the gorge of one of the above-mentioned rivers. Exploitation of the mine will produce about 500 million tones of tailings and 600 million tones of various other wastes.
The expediency of the Teghut mining project has been challenged by international as well as local experts. Strathcona Mineral Services Ltd., commissioned in 2001 by ACP, questioned the environmental safety as well as the economic viability of the project. According to their review, “given the mountainous terrain around the deposit, and the location in an area prone to severe earthquakes, there is a considerable technical and, therefore, financial challenge to deposit 500 million tones of tailings and 600 million tones of various waste categories in a safe and environmentally acceptable manner.”
Local experts in their turn analyzed the project’s impacts and revealed that the clear cutting of the planned 357 hectares of forest will likely be accompanied by drying of water sources, soil erosion, and destruction of forest area 3 times larger than the planned territory. Entire ecosystems, including habitats of endangered plants and animals will be jeopardized. Dumping tails containing silver, rhenium, lead, arsenic, copper, molybdenum, zinc, sulfurous compounds, and various chemicals used in extraction and ore processing will contaminate the rivers and valleys, affecting food safety and human health. Likelihood of landslides will be increased. There is a risk of failure of the enormous tailing reservoir, in which case the entire region will be affected, including the valley of the Debed River that crosses into the neighboring Republic of Georgia.
The environmental impact assessment (EIA) of the project conducted by ACP and accepted by the government has failed to fully consider the above-cited consequences. The EIA did not do a serious analysis of the loss of biodiversity and completely disregarded risks to human health and emergencies. It made most of its environmental cost estimations based on 15-year old methodologies of the Russian Federation and, conspicuously, disregarded the requirements of the national legislation. Environmental damage was considered only for the first 8 years of the 50-70 year project. As a result, the costs of mining were undervalued against the benefits and the project was presented to the public as having critical importance to the national economy. Authorities in charge of the review of EIA ignored the miscalculations and false data provided by ACP. The Armenian government refused the environmental NGOs’ proposal to arrange for an independent EIA with participation of international experts/organizations.
To-be-affected communities were not adequately informed about the potential environmental impacts on their livelihoods. To the extent that any public participation did take place, they were perfunctory and unproductive as all the major decisions were already made.
In the opinion of experts, operation of the Teghut mine is in breach of the principles of the UN Framework Convention on Climate Change, UN Convention on Biodiversity, UN Convention on Combating Desertification, UNESCO World Heritage Convention, European Landscape Convention, UNECE Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention) and UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters (Aarhus Convention) - all signed and ratified by the RA.
In addition, the decisions related to Teghut mining violate provisions of the RA Constitution and a number of national laws, including RA Land Code, RA Water Code, RA Mineral Code, RA Law on Environmental Impact Expertise, RA Law on Allocation of Mineral Resources for Exploration and Exploitation (RA Law on Concession), RA Law on Plants, and RA Law on Animals.
For more than four years the environmental NGOs and experts in Armenia are engaged in the campaign against the Teghut mining project. Some NGOs challenge legal infringements in the courts of Armenia. The issue of failure to ensure public participation and access to justice is additionally raised in front of the Compliance Committee on the Aarhus Convention. Local residents have applied to the European Court of Human Rights as their property was taken by ACP with miserable compensation.
We have applied to the leadership of VTB several times since 2008 and raised our concerns regarding the devastating consequences of Teghut mining project. Nevertheless, the bank disregarded the public’s voice and refused to enter into dialogue. Such a position of the bank has forced us to hold several demonstrations in front of the headquarters. The last rally on July 28, 2010 was dispersed by the police with the use of force.
We would like to note that we are determined to continue using our rights and freedoms and continue our fight against the mining of copper-molybdenum reservoir in Teghut as it violates the rights of local residents to leave in a healthy and safe environment and sacrifices the interests of future generations.
We also expect international financial institutions working in Armenia and, in particular, the EBRD to respect the mentioned rights of the Armenian people and to refrain from supporting activities that destroy our nature, health and future.
We request EBRD to express a consistent standing in respect with the environmental and social performance of its partner bank and demand VTB to demonstrate adherence to high environmental and social standards. This means VTB’s abandonment of financing ACP for exploitation of the Teghut mine. If VTB refuses to do so, we request EBRD to suspend its lending to VTB and immediately recall any loans already extended to it. EBRD’s continued support of VTB will be regarded as “political backing” of an unlawful, environmentally devastating and socially irresponsible activity. In such a case we will be left with no choice but to address these same allegations to EBRD.”
August 31, 2010